Joann, a staple in the fabric and crafts industry for over 80 years, has faced mounting challenges leading to its decision to liquidate all remaining stores.
The company's second Chapter 11 bankruptcy filing within a year, coupled with slumping sales and declining market share, culminated in the closure of approximately 850 stores across the United States.
This exit leaves a substantial void in the market, particularly for consumers who relied on Joann for sewing supplies, fabrics, and crafting materials.
Beneficiaries: Michaels and Hobby Lobby
In the wake of Joann's closure, competitors Michaels and Hobby Lobby are poised to absorb a significant portion of Joann's displaced customer base.
A survey conducted by Numerator revealed that 74% of Joann's customers intend to shift their purchases to Michaels or Hobby Lobby.
These retailers offer similar product assortments, making them natural alternatives for consumers seeking sewing and crafting supplies, fabrics, and seasonal décor.
Michaels, with over 1,250 stores across the U.S. and Canada, has been expanding its online presence and enhancing its product offerings to cater to a diverse crafting audience.
Hobby Lobby, operating more than 900 stores nationwide, continues to attract customers with its wide range of arts and crafts supplies and home décor items.
The influx of former Joann customers is expected to bolster the market shares of both retailers, solidifying their positions as leaders in the arts and crafts sector.
Impact on Walmart and Amazon
The closure of Joann also presents opportunities for retail giants Walmart and Amazon to capture a share of the arts and crafts market.
The Numerator survey indicated that 39% of Joann's customers plan to turn to mass retailers like Walmart or Target for their crafting needs, while 44% expressed intentions to shop online, potentially benefiting e-commerce platforms like Amazon.
Walmart, with its extensive brick-and-mortar presence and growing online platform, is well-positioned to accommodate the increased demand for arts and crafts supplies.
As of 2023, Walmart held a 6.3% share of the U.S. e-commerce market, trailing behind Amazon's dominant 37.8% share. The addition of Joann's former customers could contribute to an increase in Walmart's market share in this segment.
Amazon, leveraging its vast online marketplace, offers a wide array of arts and crafts products, including sewing supplies, fabrics, and crafting kits.
The convenience of online shopping, coupled with competitive pricing and fast delivery options, makes Amazon an attractive alternative for consumers transitioning from Joann.
This shift could further strengthen Amazon's position in the arts and crafts market, expanding its reach within this niche sector.
Market Projections and Trends
The global arts and crafts market was valued at approximately $45.28 billion in 2024 and is projected to reach $74.27 billion by 2033, growing at a compound annual growth rate of about 5.6% from 2025 to 2033.
This growth is driven by increasing consumer interest in DIY projects, home décor, and personalized gifts.
With Joann's exit, the redistribution of its market share among existing competitors is inevitable.
Michaels and Hobby Lobby are expected to experience immediate gains due to their established presence and product offerings that closely align with Joann's inventory.
Walmart and Amazon stand to benefit from consumers seeking alternative shopping venues, particularly those who prefer one-stop shopping or the convenience of online retail.
For smaller, independent craft stores, Joann's closure could present both challenges and opportunities.
While they may face increased competition from larger retailers absorbing Joann's customer base, there is also potential to attract consumers seeking specialized products and personalized service that big-box stores may not provide.
Strategic Considerations for Retailers
To capitalize on the shifting market dynamics, retailers should consider the following strategies:
- Product Diversification: Expanding product lines to include a broader range of arts and crafts supplies can attract a wider customer base.
- Enhanced Online Presence: Investing in user-friendly e-commerce platforms and efficient logistics can cater to the growing number of consumers preferring online shopping.
- Competitive Pricing and Promotions: Offering competitive prices and attractive promotions can entice former Joann customers to transition to new retailers.
- Community Engagement: Hosting workshops, classes, and events can foster a sense of community and loyalty among customers, differentiating retailers from competitors.
The closure of Joann Fabrics and Crafts signifies a pivotal moment in the arts and crafts retail industry. As competitors like Michaels and Hobby Lobby absorb displaced customers, and major retailers such as Walmart and Amazon seize new opportunities, the market is poised for a significant transformation.
