The final cut: Joann Fabrics is closing—here’s what small business owners need to know

In this Article:

• Why is Joann Fabrics closing?
• What this means for small business owners
• Lessons every small business can take from Joann’s downfall
• The bottom line

The news is official: Joann Fabrics is closing all 800 stores after struggling with debt, supply chain issues, and tough competition. If you’re a small business owner who relies on Joann for fabric, craft supplies, or even just inspiration, this is a major shake-up.

But beyond the immediate frustration of losing a go-to supplier, there’s a bigger lesson here, one that can help small businesses stay stronger, smarter, and more competitive in an unpredictable market. Read on for valuable tips and insights.

Why is Joann Fabrics closing?

Joann Fabrics isn’t the first major retailer to collapse, but its downfall highlights key business mistakes that small business owners can learn from. Here’s what went wrong.

1. Too much debt, too little flexibility. Joann had over $615 million in debt, making it impossible to adapt when sales slowed down. For small businesses, this is a reminder to keep overhead low and stay financially flexible. 
    
2. Ignoring customer needs. It’s reported that customers felt Joann stopped caring about the people who actually used their products. Their leadership team lacked experience in sewing and crafting, which led to decisions that didn’t align with what customers wanted. Small businesses have an edge here, so stay connected to your customers and give them what they actually need. 
    
3. Not providing a user-friendly online experience. While Joann had a website, customers frequently reported issues with its functionality. Users described it as "complete garbage" and "full of glitches," making online shopping frustrating. Despite efforts to improve, e-commerce sales remained a small fraction of total revenue, highlighting the website's shortcomings. The lesson? Even if you run a brick-and-mortar store, a strong customer centric online presence is essential. See our guide on choosing the best web hosting for your small business.

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What this means for small business owners

If Joann was your go-to supplier, now’s the time to find alternatives before stores close for good. Here are some options.

• Independent craft supply shops – Many local shops offer unique materials and may benefit from Joann’s closure.
• Wholesale fabric and craft suppliers – Consider ordering in bulk to save money.
• Online marketplaces – Sites like Etsy, Spoonflower, and Fabric.com offer a wide variety of materials.
• Direct manufacturer relationships – Cutting out the middleman can lower costs if you order frequently.

Take advantage of store closing sales 

Before Joann Fabrics closes its doors completely, small business owners can capitalize on clearance sales to stock up on materials at potentially deep discounts. As the stores near final closure, they may also sell fixtures, shelving, tables, and other store furniture at reduced prices. These assets could be useful in setting up or improving a workspace, retail area, or storage system. Keeping an eye on liquidation sales could be a cost-effective way to equip your own business for the future while saving money.

Beyond just stocking up, this is a wake-up call for all small businesses: even big, established companies aren’t safe if they fail to evolve.

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Lessons every small business can take from Joann’s downfall

Whether you sell craft supplies, services, or anything in between, Joann’s closure offers some valuable takeaways.

✅ Listen to your customers – Joann losing touch with its audience may not have helped the current situation they find themselves in. Engage with your customers, ask for feedback, and make sure you’re meeting their needs. Learn why customer service is essential for businesses.

✅ Adapt to online shopping trends – Joann had difficulties in keeping up with Amazon, independent sellers, and other competitors. Even if you prefer in-person sales, having a strong, user-friendly website and e-commerce option keeps your business competitive.

✅ Keep finances in check – Joann’s growing debt left no room for mistakes. Keep an eye on your expenses and avoid overextending your business.

✅ Build community loyalty – Many small business owners thrive because of strong relationships with customers. Host events, connect on social media, and make shopping with you an experience, not just a transaction.

✅ Diversify your supply chain – If you rely too heavily on one supplier, you’re at risk when things go south. Find multiple sources for your materials to avoid disruptions.

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The bottom line

💡✍ Joann Fabrics is closing, but small business owners can turn this challenge into an opportunity. By staying adaptable, listening to customers, and embracing smart business practices, you can thrive—even when major retailers fail.

What’s your next step? If Joann’s closure affects you, start sourcing new suppliers now and think about how to strengthen your business for the future. This isn’t just Joann’s story—it’s a lesson for every small business out there. 

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