Did you know that before it became a fabric empire, Joann's founders sold cheese in their first store?

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Joann Fabrics was founded as a part of dream seen by 4 friends against the backdrop of World War 2, in 1943.​
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The store's name, "Jo-Ann," was a heartfelt tribute, combining the names of the founders' daughters, Joan Zimmerman and Jackie Ann Rosskamm.
​This personal touch later on went to become the brand story that resonated with customers, fostering a sense of community and parenthood.
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Did you know that In the 1970s, Joann Fabrics introduced a special DIY model for brides-to-be, where they could buy sewing patterns and materials to create their own wedding dresses?

Perceived Value Proposition:

• Joann’s uniqueness was in its vast selection of fabrics and crafting supplies.
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• Knowledgeable staff who often shared customers passion for creativity, added a much deeper experience for customers.
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• The stores became communal spaces where where people shared ideas and skills.​
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• Marketing campaigns like “Aisles of Smiles” emphasised this community-centric approach, inviting customers to find their “happy place” within the store’s aisles.

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One of Jo-Ann Fabrics’ most memorable early campaigns was the “Aisle of Smiles” initiative in the 1990s.
Focus was to cultivate the sense that each aisle in a Jo-Ann store was a gateway to imagination, fun, and discovery

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Key Initial Financial Indicators of Business Health:

• By the 1990s, Joann operated hundreds of stores across the United States, building its position as a leader in the fabric and craft retail industry.
• The company went public in 1969, allowing it to raise capital for further expansion and modernisation efforts.
• In 1994, Joann acquired Cloth World, a 342-store company, expanding its national presence.
• In 1998, Purchased House of Fabrics, adding 671 stores and further building the ecosystem.
• In the 2010s, Joann launched an e-commerce platform to adapt to changing consumer behaviours, aiming to complement its brick-and-mortar presence
• In 2011, Leonard Green & Partners acquired Jo-Ann Stores for $1.6 billion.

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For a lot of people, Joann wasn’t just a store or a community space but also, a friendly place to just hang out. The chain had such a distinct personality, but even the most loyal customers often complained that the store shelves were really a mess, more like jumbled mahjong.

Loss of Relevance:

But if one had to pin point, a single most critical turning event for Joann Fabrics, it was its failure to timely embrace e-commerce, particularly around the mid-to-late 2010s.
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This delay allowed digital competitors like Amazon, Etsy, and other specialised online retailers to rapidly capture market share by offering consumers convenience, lower prices, and greater variety, especially for younger, digital savvy customers.
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Did you know that Joann's financial struggles led to two bankruptcy filings within just one year, resulting in the closure of all 800 stores?

Triggers for downfall:

• E-Commerce Competition: The rise of online marketplaces and competitors offering greater convenience and often lower prices eroded Joann’s market share.
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• Inventory Disruptions: Suppliers discontinued key products, causing erratic deliveries and leading to inventory shortages, further impacting customer satisfaction.
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• Debt Mismanagement: The balance of a $1.6 billion leveraged buyout in 2011, continued to weigh heavily, limiting the company’s ability to invest in necessary innovations and adaptations.

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5 Key Takeaways for Startups to avoid burning $2.1 Billion:

1. Market Trends: :Joann's delayed e-commerce integration allowed competitors to capture online market share.​
   ​Takeaway: Continuously monitor and adapt to evolving consumer behaviours and don't put your head in the sand, while the rest of the desert moves on.
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2. Diversify Supply Chains: Business loyalty turned into over-reliance for Joann, and because of its dependency on specific suppliers, it suffered significant inventory disruptions.​​
   Takeaway: Establish robust and diversified supply chains to mitigate risks of inventory shortages don't confuse dependency with business relations IYKYK.
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3. Manage Debt Prudently: More Money is not always a great thing, especially if you don't know how to spend, The leveraged buyout left Joann with burdensome debt, limiting its ability to innovate.​​
   Takeaway: Financial discipline is an underrated skill, Founders need to void excessive debt which can hinder flexibility and growth.​
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4. Business Automation: Joann's late adoption of e-commerce and business automation in general resulted in lost market share to online competitors, this was well evident in their subsequent mismanagement of large inventory overloads.​
   Takeaway: Technology is actually a great ally to have, especially to meet your consumers, right where they are.​
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5. Consumer Needs: Company's failure to attract younger demographics led to a shrinking customer base.​
   Takeaway: Biggest drawback in ageing customer base is that they phase out and the new ones taking their place will not necessarily like you, so you have to regularly engage with customers to anticipate their evolving needs.​