Estimated read time: 2-3 minutes
- Michaels is expanding its fabric selection after Joann's collapse, buying its label.
- The retailer adds 600 products, including Joann's 'Big Twist' yarn and fabric.
- Michaels faces financial challenges but sees growth opportunities in Joann's market gap.
NEW YORK — Michaels is jumping into the void left by the collapse of Joann, announcing Thursday that it's buying the fabric retailer's private label and drastically expanding its sewing selection.
In a press release, Michaels said that searches on its website for the word "fabric" have jumped nearly 80% over the past year and "sewing" has increased by about 40%, prompting the retailer to make a "significant investment" in the category in hopes of attracting Joann's fans.
In response, Michaels is adding 600 products across several categories, including sewing and quilting supplies, fabric and yarn as well as sewing machines. So far, 680 of its 1,300 stores have received the increased selection, with plans for 280 more locations by the end of the year.
Shoppers will also begin to see products from Joann's fan-favorite "Big Twist" yarn and fabric private label as part of the deal. The lineup is being "developed as part of Michaels portfolio of brands and will be available in-stores and online later this year," the company said.
"This acquisition allows us to better serve both new and existing customers, respond to rising demand across categories, and build on our momentum as the destination for creating and celebrating in North America," said Michaels CEO David Boone in a release.
Michaels also bought Joann's intellectual property, including its name, although no specific plans were announced for that. Joann's 800 brick-and-mortar stores have all closed over the past few months.
This isn't the first time Michaels is taking advantage of the collapse of a rival. In April, the closure of about 700 Party City stores prompted Michaels to expand its selection of balloons and other celebration-themed supplies.
Despite the expansion into new categories, financial consulting firm Debtwire said that it added Michaels to its "Retail Distressed Watchlist" because of the toll on tariffs, since 75% of its suppliers are from China. However, Michaels is privately held and doesn't give people a full look at its financials.
"Purchasing the Joann intellectual property and private label brands is an inexpensive way for Michaels to expand its product line, as there were probably not many other buyers interested in those assets," Tim Hynes, head of credit research for Debtwire, told CNN.
