Crafting store Joann is in a bankruptcy stitch as people pack up pandemic hobbies

Lost the thread… Joann filed for bankruptcy yesterday after its losses piled up like a ruffled hem. The 81-year-old craft store chain, which IPO’d for the second time in 2021, specializes in fabrics sold by the yard. Like many retailers that catered to homey hobbies, Joann thrived during the pandemic as folks took up knitting and embroidery. But it struggled to retain sales after people stopped sewing “Team Moderna” face masks.

• Unravel: Joann’s loss widened to nearly $22M in its last reported quarter, and it’s sitting on $2.4B in debt. Unable to patch up falling sales, the company announced layoffs in September.

• Stitched up: Joann said it doesn’t expect to close any of its 800+ stores, and it’ll return to being a private company as soon as next month when the bankruptcy process wraps up. FYI: rival Michaels also went private in 2021.

Back in the junk drawer… Shoppers are spending less on nonessentials including color-by-numbers painting, dog-hat knitting, and other pandemic hobbies. The go-to ecomm site for homemade goods, Etsy, saw its revenue double in 2020 as the craft-economy boomed. But late last year it announced layoffs as it faced “stiff headwinds.” Etsy’s coping with what one expert calls “digestion years” following the stuck-at-home-economy boom. Similarly, Lowe’s and Home Depot sales struggled as Americans stopped re-tiling their kitchen backsplashes.