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Tag Archives | Jo-Ann Stores

Industry Retailers Make NRF Stores Hot 100

Stores, a publication of the National Retail Federation, has released its Stores Hot 100 list of the country’s fastest growing retailers – and several craft-related stores made the 2011 list. The list is ranked based on year to year sales growth from 2009 to 2010. All retailers with domestic U.S. sales of over $300 million were eligible.

Salt Lake City-based Overstock.com, an often overlooked player in the crafts retail market, landed in the number 10 spot on the list by posting 23.8% growth from 2009 to 2010. Stores attributes this to the growing portfolio of markets that company has expanded into, including travel (by selling discount hotel rooms). A ranking penalty incurred by the company from Google over accusations it manipulated Google results by embedding links in school websites in return for promised discounts has left Stores skeptical that Overstock can repeat those year-to-year growth results, however.

Both home shopping networks made the list. HSN ranked highest, coming in at number 44 with 9% year-over-year growth. Known for its promotion of lines like Cricut, Anna Griffin and Martha Stewart Crafts with custom created bundles during its on-air craft specials, HSN is definitely a force in the new model of retailing and their growth reflects that. Although nearly twice the size of HSN in total sales, home shopping network QVC was further down the list at number 85 due to experiencing a smaller (but still impressive) amount of year to year sales growth (5%).

Near the bottom of the Stores list we find two craft chain stores. First up is Jo-Ann Stores. That chain placed in 95th on the chart with 4.4% sales growth, on $2.079 billion in retail sales from 751 stores. The other craft chain on the list, Hobby Lobby, came in at number 96, also showing 4.4% sales growth in the surveyed period. Privately-held Hobby Lobby’s sales were reported as $2.093 billion, surpassing Jo-Ann Stores, and with only 497 store locations. Hobby Lobby’s growth numbers were undoubtedly helped by opening of new locations – it experienced store growth in the covered period of 5.7%, while Jo-Ann Stores only expanded their locations by 0.7%.

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Tornado Destroys Jo-Ann’s Store in Joplin, MO

The Joplin, MO store of Jo-Ann Fabric & Crafts was among the scores of businesses destroyed in the F5 tornado that swept through the heart of the city’s business district on Sunday evening, decimating the Joplin and killing at least 125 people.

The Jo-Ann’s store, located in a strip mall on Rangeline Road, was open for business at the time of tornado, and there were both staff and customers inside the store according to a Jo-Ann Stores spokesperson. There were no fatalities at the store, but the store itself was described by the company as destroyed.

The Jo-Ann Fabrics & Crafts store (center, above red trucks) in Joplin, MO after the F5 tornado on May 22nd, 2011. Photo courtesy of Flickr user: macahanC6R (Eje Gustafsson).

As heavily damaged as this shopping center is, the area around it is largely completely leveled. Piles of debris mark the former locations of restaurants and shops lining the business strip. The video below can help give some grasp of the massive scale of the destruction in that area of Joplin. The Jo-Ann’s is the large store in the middle of the strip mall that appears across the street near the end of the video.

Jo-Ann Stores says that it is assisting both its employees and the community at large as they attempt to recover from this devastating event. Some Jo-Ann’s employees did unfortunately lose their homes in the disaster.

Other area crafts stores largely escaped damage in the tornado on Sunday. Hobby Lobby’s Joplin store – which is located near the devastated Walmart and Home Depot seen frequently in news reports – sustained relatively minor damage in the storm according to Facebook postings. The store’s windows were blown out and since the parking lot is being used as a staging area by emergency personnel, they will have to wait till the area is more secure to get approval from authorities to re-open the store.

Michael’s Stores’ location in Joplin was fortunate to be located approximately a quarter-mile outside of the tornado’s path. The store sustained no damage and there were no injuries.

Please join Scrapbook Update in donating to the Red Cross to provide support to the victims of the tornadoes and floods that have devastated the midwestern United States this spring:

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Jo-Ann Stores To Go Private In Buyout

Jo-Ann Stores announced today that they have agreed to be acquired by Leonard Green & Partners, L.P., a private equity firm, for approximately $1.6 billion. The $61 per share purchase price is a 34% premium over the company’s trading price at market close on Wednesday.

Leonard Green & Partners is a Los Angeles-based private equity firm with over $9 billion in managed capital. Their retail investments include Whole Foods Market, PETCO Animal Supplies, Sports Authority, The Container Store, David’s Bridal, and Neiman Marcus.

The purchase was approved by a unanimous vote of the company’s board of directors, after a recommendation was made to it by a special committee of independent directors.

Jo-Ann Stores’ lead director and chairman of the Special Committee, Scott Cowen, explained the decision:

After a thorough assessment, the Special Committee and the board of directors concluded that the proposal put forth by Leonard Green & Partners is the best way to maximize value for shareholders, who will receive a substantial and immediate cash premium for their shares. While the company was not actively seeking this transaction, once the offer was received and negotiated, the Special Committee determined that it was in the best interest of the company’s shareholders, as well as its employees and other partners. Leonard Green & Partners has significant expertise in the retail space and is dedicated to cultivating and supporting the growth of Jo-Ann’s business.

The transaction still has to be approved by a vote of Jo-Ann Stores stockholders, and receive regulatory approval. Jo-Ann Stores also holds the right to solicit other competing offers for itself until February 14th, 2011 to ensure its stockholders receive the best deal.

Financing for the transaction will be provided by J.P. Morgan, Bank of America Merrill Lynch and TCW/Crescent Mezzanine.

The buyout of Jo-Ann Stores by a private equity firm will leave the struggling AC Moore as the only major craft chain that is publicly held. Hobby Lobby is family owned, and Michaels is owned by private equity groups Bain and Blackstone (although rumors persist that a public stock offering is in the near future).

Jo-Ann Stores has been growing steadily the past few years, increasingly its sales and improving its financial results, making it an attractive takeover target in a declining retail economy. On December 1st, the company announced its 3rd quarter 2011 sales (quarter ended Oct. 31st). Net sales were up 5.1% over the 3rd quarter of 2010, while same-store sales were up 4.1%. For the nearly-concluded Fiscal 2011 year, the company said it expected to open 30 new stores and close 25 stores. In Fiscal 2012 they are planning even more expansion – anticipating opening 55 to 60 new stores. These numbers are in addition to large numbers of store remodels that are also being done. Online has also been an area of growth for the company, where sales have gone up in double-digit percentages, although the website still accounts for only a tiny portion of the company’s total.

The transaction is expected to be completed in the first half of 2011.

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Jo-Ann Stores To Exhibit At CHA Summer Craft Supershow

The Craft & Hobby Association announced this week that Jo-Ann Fabric and Craft Stores will be exhibiting at the CHA Craft Supershow in Rosemont, IL next month.

Jo-Ann Stores joins other big-box stores Michaels and Archivers in attending the Supershow in Rosemont. The company will occupy a 40 x 50 foot space at the show that will includes inspirational craft ideas and make-n-take projects.

“As more people discover the joy and creativity of sewing and crafting, Jo-Ann is especially pleased to be part of the upcoming CHA Shows in Rosemont,” explained Riddi Kline, senior vice president, marketing, Jo-Ann Stores, Inc. “The CHA Craft SuperShow is in line with our own goals of providing consumers with a wide array of fabrics, sewing, and crafting supplies, while inspiring customers with knowledge, helpful service and value. The Show will help us better understand how to inspire our customers as they interact with various products.”

The CHA Craft Supershow will take place at the Donald E. Stephens Convention Center in Rosemont, IL on July 30-31st, 2010.

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Jo-Ann Stores Announces First Quarter Results

Jo-Ann Stores, Inc announced its first quarter 2011 financial results on May 26th. The quarter ended on May 1st, 2010.

Net income from the quarter was $18.2 million ($.66 per diluted share) compared with 2010′s first quarter of $8.6 million ($.33 per diluted share).

First quarter net sales were up 4.4%, from $460.0 million last year to $480.3 million this year. Same-store sales saw a 4.1% increase, compared to a 1% in the first quarter last year.

Here are the company’s sales broken down by store type:

  • Large format stores: Net sales increased 3.9% over the same period last year, to $257.2 million. Same-store sales increased 1.9% for the period after being down .6% in the period last year.
  • Small format stores: Net sales were up 4.9% to $212.8 million over the same period last year. Same-store sales were up 6.9%, after being up 3% for the same quarter last year.
  • Online: Sales were up 8.4% over the same period last year to $10.3 million. According to Jo-Ann Stores executives in the conference call announcing the results, Joann.com only accounts for 2.1% of the company’s sales, although there are 33% more SKUs available online now than this time last year.

Gross margin increased in the first quarter to 50.5%, up from 48.5% in the same quarter last year. The company attributes this increase to “global sourcing efforts, improved inventory management of seasonal and clearance merchandise, and promotional markdown optimization.” Company executives stressed in the earnings call that the company cannot continue this rate of improvement in their gross margin.

The company had no debt outstanding at the end of the quarter, and their average debt load during the quarter was $14 million. At the end of the first quarter of last fiscal year, the company had $50.5 million in debt. Their average debt load during the previous year’s same quarter was $55 million. The company’s cash position also improved to $160.7 million, up $75.7 million from the previous year’s same quarter.

For the current fiscal year, the company expects to open 30 new stores, close 25 stores, and remodel 40 stores. In the first quarter, the company opened ten stores (two large format & eight small format) and closed six small format stores. It also remodeled 12 stores, including transitioning one store from small to large format.

Other interesting points from the earnings call:

  • 53% of the company’s sales come from the sewing department
  • The food department is emerging as a strong category
  • Transactions are up 2.9% over last year same quarter; Ticket amount is also up.
  • The company is keeping lower inventory levels than it has historically.
  • The company says consumers are realizing that retailers are keeping tight inventories on seasonal items so they aren’t delaying those purchases which helps sell-through and margin on those items.
  • Scrapbooking as a category was not mentioned at all in the earnings call.

One of the company’s major competitors is Walmart, which is accelerating the pace of store remodels that are removing fabric departments from many stores. Walmart’s planogram reset in June will be a key indicator of whether they intend to reduce footage in the crafts department. According to the Jo-Ann Stores earnings call, a previous reset showed vendor consolidation and a reduction in SKUs but no reduction in the linear footage of the department.

Darrell Webb, chairman and chief executive officer stated, “Our team delivered record financial results in the first quarter of fiscal 2011. Sales remained strong, even as we began to cycle positive sales results from the previous year. Our seasonal merchandise and custom framing categories, which struggled through the recession, delivered positive sales trends for the first time in two years. I was also pleased with our continuing progress on global sourcing and inventory management which contributed to our gross margin improvement.” Webb concluded, “We believe Jo-Ann Stores is positioned for sustainable sales and margin growth as we execute our strategic initiatives.”

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Jo-Ann Stores Sales Up in First Quarter

Jo-Ann Stores, Inc. reported their first quarter 2011 sales today, and the company continued their strong performance from the end of 2010.

For the quarter of fiscal 2011 which ended May 1st, 2010, net sales increased 4.4% to $480.3 million compared to $460.0 million for the same period in fiscal 2010. Same-store sales increased 4.1% versus a same-store sales increase of 1.0% for the first quarter last year. Traffic increased 2.9% and average ticket increased 1.2%.

Jo-Ann was led by the performance of its large-format stores. Net sales for the quarter in those stores increased 3.9% to $257.2 million compared to the same period last year. Same-store sales for the large-format stores increased 1.9% compared with a decrease of 0.6% in the first quarter last year.

The company’s small-format stores were also strong contributors, with net sales in those stores increasing 4.9% to $212.8 million compared to the same period last year. Same-store sales in these small-format stores increased 6.9% compared with an increase of 3.0% in the first quarter last year.

Jo-Ann Stores’ sales online through Joann.com also grew significantly in the first quarter, up 8.4% to $10.3 million compared to the same period last year.

Same-store sales in the sewing segment were up 5.5% over the same period last year. Same-store sales in non-sewing categories were up 3.2%, which the company attributes to growth in core craft merchandise categories and strong seasonal category performance.

The company’s stock (NYSE: JAS) closed down $2.31 (5.21%) to $42.07 on the news. However, the entire market dropped significantly on the day, with the Dow closing down 3.2% for the day.

Jo-Ann Stores was also recently named by Forbes magazine as one of America’s 100 most trustworthy companies based on their accounting, corporate governance, and management practices. The Forbes list was based on the results of a survey conducted for the magazine by Audit Integrity.


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