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ReapWhat You ‘Sew’ The Smart Pandemic Tactics of JOANN Fabrics and Crafts
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“I spent thousands of dollars last year on supplies at JOANN,” Hamlin told Forbes. She usually puts in her orders online and picks them up at the store. Now, Hamlin is there 3 to 5 times a week just to keep up with her Etsy store, which attracts over 3,000 orders every week. She works about 9 hours a day from her dining table to keep up. There are millions of creators just like Hamlin, whether they sell on Etsy, eBay, or Shopify or simply wanted to focus on new DIY projects. But it’s not just the “Etsy boom” that attracted customers to JOANN over its competitors like
When the pandemic hit, the stocks for brick-and-mortar stores tanked — nobody thought they would come out unscathed. But JOANN Fabrics and Crafts did even better. In fact, it came out on top with a 24.3% rise in sales (as of Oct. 31, 2020) to nearly $1.921 billion in 2020, a net income of $174 million. The success has prompted JOANN’s owners, a private equity firm called Leonard Green & Partners, to file an IPO Prospectus with U.S. regulators, preparing to turn JOANN’s stock public for the first time since 2011. This is huge; it wasn’t long ago that JOANN was on a watchlist for possible bankruptcy. Thanks to Amazon and many online retailers, JOANN began to stall in 2018 and 2019. It developed a large amount of debt, which it’s still riding on at nearly $921.6 million today. But with the huge amount of recent success, it’s possible that JOANN will be around for a long time to come. How did the company do it? Why did it thrive while many other brick-and- mortar stores are struggling, even shutting their doors for good? We have a couple answers for you. The Etsy Boom Extra time at home left many creators with more time to, well, create. This made many people want to buy their supplies in bulk, especially for creating masks at the beginning of the pandemic. You’d think many of these creators would turn to Amazon. While many certainly did, JOANN didn’t begin folding — instead of cutting down inventory, it kept the wide diversity of products it offered. For example, when Kimberly Hamlin decided to sell high-end masks for brides, grooms, and other members of their bridal parties, she went to JOANN because their choices were vastly superior to the rest.
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Michaels or Walmart — it’s also the fact that JOANN was prepared to accept its newfound consumer favor by diving deeper into its own sewing niche. Finding Your Needle in the Haystack If you’re into any niche hobby, it’s probably a little more difficult to find a niche store today than it was in the early 2000s, when online shopping hadn’t completely taken over. But that’s not the case for avid sewers, tailors, and clothing designers. They can have all their needs met at JOANN, which began completely revamping its customer experience and remodeling stores in 2018. In the eyes of tailors, JOANN can easily beat any of its broader arts and crafts or mass merchant competitors like Michaels, Target, Walmart, and maybe even Amazon. To give you an idea of the difference between Michaels’ and JOANN’s growth, Michaels’ sales grew only 0.9% in the first nine months of the pandemic. JOANN prepared for growth by diving deeper into its niche — and when the pandemic arrived, it was more prepared than many other brick-and-mortar
stores around. In a world where Amazon and online sellers are taking over, more companies are sure to follow the JOANN model of success. JOANN’s CEO, Wade Miquelon, would agree, recently telling Forbes, “There are large, fundamental trends that aren’t going away, so it’s our job to fuel that.” Congratulations JOANN for your massive success! We can’t wait for more specialty stores to follow your model. We’re rooting for you!
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