To its dedicated fans, JoAnn Fabrics wasn’t just a fabric store. It was a vital hub for small businesses – wedding dress makers, upholsters, milliners and rug repairers. It taught generations to make, fix and craft. A visit sparked new ideas in a way that shopping online just can’t replicate.
Since it became one of hundreds of US companies bankrupted by private equity investors in 2025, it has been sorely missed.
Its rise and fall, from a Cleveland, Ohio, store founded by German immigrants in the 1940s to the 800-store chain closed by Leonard Green & Partners, has been memorialized in videos and Halloween costumes.
But what was declared dead may not be gone forever. JoAnn’s dedicated followers are trying to figure out a way to bring the essence of the store back, minus the investors who gutted the company.
“The ultimate big dream is to try to create an ecosystem that connects all of these people in the crafting world,” said Sandy McClenahan, 35, a legal assistant, hat maker and former tech industry relationship manager. “The model we’re investigating is how member-owned and/or worker-owned co-ops can help do that.”
McClenahan published a survey last month suggesting a call to action: “A craft and fabric co-op, owned by us.” The post got hundreds of responses, including one person from every US state and 30 who wanted to be founding members.
It wouldn’t be just about buying fabrics, McClenahan added. The goal is to preserve individually owned businesses and the skills owners have. “How can we create an ecosystem that helps all of these crafts stay afloat and not get eaten up by private equity?’”
In an era of brutal private equity cost-cutting, ballooning corporate monopolies and shrinking consumer power, the notion of a communal movement replacing JoAnn, which earned more than $2bn in annual revenue in its last good years, may seem like a naive idea or an arcane curiosity. But businesses that prioritize users and workers’ over profits are not only deeply embedded in US history, they are growing and thriving as a reaction to the current state of US capitalism, cooperative specialists say.
“People don’t want to feel that the economy is something that’s being done to them,” said Julie Bosland, the head of the Cooperative Development Foundation, a national non-profit.
Like publicly traded companies, these entities invest and earn revenues, Bosland said, but they use that capital as a means to grow a business “that serves the members and the community”.
Worker-backed cooperatives are growing particularly fast in the US, more than doubling from 315 firms in 2014 to 820 in 2024, in part because of drivers’ cooperatives, or driver-owned rideshare platforms. They join about 30,000 other US cooperatives, including brand names like REI, Ace Hardware and Land O’Lakes, as well as purchasing groups that dominate the farming business and credit unions for employees of corporate giants like Boeing.
After stagnating for years, the number of employee stock ownership plans, or Esops, that gives workers ownership of the company they work for, has also risen for the past three years on record, with more than 6,400 companies offering plans to employees. A federal bill passed 16 September is expected to make it easier for more to form and follow in the footsteps of employer-owned companies like grocer Publix and midwest sports retailer Scheels.
And US demographics are about to give the entire movement a big boost, enthusiasts believe.
A big chunk of US small businesses, about 40%, are owned by baby boomers, the 70 million Americans born between 1946 and 1961, who are now retiring. They’re about to transfer about $5tn in small business assets, McKinsey estimates, a shift dubbed the “silver tsunami” by banks and advisers.
Private equity funds are already jumping in, snapping up everything from funeral homes to dentists to HVAC repair shops from retiring owners. A growing chorus, including Harvard Business School, suggests these owners consider cooperatives instead.
The transition “isn’t going to be for everyone”, said Charity Schmidt, development specialist at the University of Wisconsin’s Center for Cooperatives, which helps companies through the process. “Some people are like: ‘I’m tired, I want to retire, give me my check,’” she said. “But a lot of people want to see their legacy of what they built continue. They care about their employees,” their neighbors and their community, she said.
Formerly family-owned Ward’s Lumber in upstate New York is among the recent success stories. “That lumberyard is still locally rooted, so the profits are still in the community, and people don’t have to drive an hour” to get lumber and other supplies, said Bosland.
REI, the Washington state outdoor cooperative that was started nearly 90 years ago by friends who were climbers, could be a good model for JoAnn’s users, said Doug O’Brien, president and CEO of the National Cooperative Business Association, a trade group. “They care about really good products, and … the culture of that sector, and the community of that sector,” O’Brien said.
McClenahan stressed it’s still very early days for JoAnn’s resurrection plans, but a shared physical space is key.
“Being able to talk to people who don’t even do the same craft is just as important as being able to talk to somebody who does the same craft as you, because you never know what you’re gonna learn,” she said. “Those stores, they spark creativity just as much as they provide the things that you need.”
