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Dive Brief:
Michaels has acquired Joann’s intellectual property and private labels as its own customers’ interest in sewing grows, the company said Thursday. Michaels did not acquire any physical Joann locations as part of this transaction, a company spokesperson said by email.
The spokesperson declined to disclose the purchase price and didn’t address questions about how it might use Joann’s logo or other trademarks, except to say it will be developing Joann private brands Big Twist Value Plus, Big Twist Twinkle, Big Twist Posh and Big Twist Baby Bear.
Joann’s assets were sold in February, with plans to wind down, about a month after the retailer filed for bankruptcy for the second time in less than a year. Store liquidation sales are ongoing.
Dive Insight:
Michaels is making an art of swiftly moving into territory ceded by bankrupt rivals.
After Party City closed its nearly 700 stores last year as part of its second bankruptcy in less than two years, Michaels beefed up its assortment of balloons and party supplies and expanded in-store availability for celebrations, private events and crafting activities.
More recently, Michaels has expanded its fabric, sewing and yarn assortment, adding more than 600 products, the company said Thursday. Searches on Michaels’ website for “fabric” rose 77% over the past year and for “sewing” are up 39% since last year, according to a press release.
The company may have Joann to thank, given that Joann’s customers are more likely to turn to Hobby Lobby or Michaels as stores close, according to Numerator research. Eight in ten of those surveyed also said they were upset by Joann’s closures.
Other bankrupt retailers have seen at least fragments of their brick-and-mortar footprints preserved after initially planning to fully wind down. Big Lots, for example, is reopening another 80 or so stores this week under new ownership, bringing its footprint to nearly 220 (down from about 1,300 at the time of its bankruptcy last year).
For now, despite its control of Joann’s IP, Michaels seems content to hang out a “welcome” sign with a web page dedicated to Joann customers. It’s unclear how the Joann brand might be used — or buried — with Michaels in control of the IP.
“We’re honored to have the opportunity to welcome Joann customers into our creative community and are committed to delivering the selection, value, and inspiration they are looking for at Michaels,” Michaels CEO David Boone said in a statement. “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.”