2-Milliarden-Dollar-Katastrophe: Wie Leonard Green Joann Fabrics in 11 Monaten tötete

Originaltranskript auf Englisch. Titel, Zusammenfassungen und FAQs sind übersetzt. Die vollständige Erzählung ist über YouTube-Untertitel in Ihrer Sprache verfügbar.

Am 12. Februar 25 unterzeichnete der Vorstandsvorsitzende von Joann Incorporated eine Acht-K-Anmeldung bei der Securities and Exchange Commission. Das Unternehmen würde fünfhundert Geschäfte schließen. Elf Tage später unterschrieb er einen weiteren. Das Unternehmen würde alle Filialen schließen. Alle achthundert Standorte. Neunzehntausend Mitarbeiter. Am 30., 25. Mai verschwunden.

Joann Fabrics – 1943 von zwei deutsch-jüdischen Einwandererpaaren am Lakeshore Boulevard in Cleveland gegründet – wurde hingerichtet. Es war die zweite Insolvenz innerhalb von elf Monaten. Die erste, eingereicht am 18. März 24, sollte der Neuanfang sein. Dadurch wurden Schulden in Höhe von fünfhundertfünf Millionen Dollar aus der Bilanz gestrichen. Neun Monate später war das Unternehmen erneut pleite. Auf diese Weise kaufte eine Private-Equity-Firma namens Leonard Green and Partners aus Los Angeles ein 81 Jahre altes amerikanisches Handwerksimperium für eins Komma sechs Milliarden Dollar, belastete es mit Schulden, kassierte über dreihundert Millionen Dollar an Gebühren und Dividenden und ließ eine Leiche hinter sich. So starb Joann – nicht bei einem Brand, sondern in einem ruhigen Büro in Century City, mit einem Taschenrechner.

Cleveland, Ohio. Nineteen forty-three. The war is still on. Steel is rationed. Sugar is rationed. Two German-Jewish immigrant couples — Hilda and Berthold Reich, and Sigmund and Mathilda Rohrbach — pool their savings and open a small shop on Lakeshore Boulevard called the Cleveland Fabric Shop. They had arrived in America years earlier, fleeing the rise of the Nazi regime. The Reichs had spent years in the food-importing business: Swiss cheese, anchovy paste, pickles. The Rohrbachs had worked alongside them. The new business is fabric, sold by the yard, to a postwar American housewife learning to sew her own curtains, her own dresses, her own children's school clothes. The store stocks cotton prints, woolens, buttons, zippers, and thread. It survives the first winter. It survives the next. By nineteen forty-seven, Hilda's daughter Betty has joined the business. The second generation is already in the store. The chain grows slowly at first. One store. Two. A handful by the mid-fifties. The pattern is patient and conservative. Each new location is funded out of retained earnings. There is no outside capital. There are no leveraged loans. There is only fabric, by the yard, paid for with cash.

Nineteen sixty-three. The chain renames itself Jo-Ann Fabrics — Joan plus Jacqueline Ann, the founders' two daughters. Nineteen sixty-eight: a corporate rebrand to Fabri-Centers of America. Nineteen sixty-nine: an initial public offering on the American Stock Exchange. Twenty-eight states. The Reichs and the Rohrbachs are now public-company shareholders. Their fabric shop has become a small American institution. The chain keeps growing. The Cloth World acquisition in nineteen ninety-four adds three hundred and forty-two stores. House of Fabrics in nineteen ninety-eight adds two hundred and fifty more. By the year two thousand, Joann crosses one thousand locations. It is the largest specialty fabric retailer in the United States. The Reich and Rohrbach families have built, over three generations, a national craft empire from a single storefront on a Cleveland boulevard. Long-term debt: minimal. Cash position: healthy. The business model is unglamorous and durable.

March twenty eleven. Leonard Green and Partners — the Los Angeles private equity firm founded by Leonard Green in nineteen eighty-nine and run day-to-day by his protege Jonathan Sokoloff — announces a leveraged buyout of Jo-Ann Stores. Cash price: one point six billion dollars. Per share: sixty-one dollars. The Joann board accepts. The deal closes. The financing structure is the standard private equity playbook. Roughly seven hundred and fifty million dollars of new term loans and senior secured notes are layered onto the operating company. Before the deal, Joann's long-term debt was effectively zero. After the deal, the company carries close to a billion dollars in funded debt. Same stores. Same employees. Same fabric. Suddenly paying ninety to one hundred million dollars a year in interest. The fabric does not change. The customer does not change. Only the balance sheet changes.

For the next decade, Leonard Green operates Joann as a private cash machine. The mechanisms are technical, but the pattern is simple. Dividend recapitalizations: borrow new money against the company, pay that money out to the private equity owners. Payment-in-kind notes: defer interest by issuing more debt instead of paying cash. Management fees: charge the operating company an annual consulting fee for the privilege of being owned. Sale-leaseback agreements: sell the company's distribution centers and headquarters to outside landlords for a lump sum, then sign long-term leases on the same buildings. The cash flows up, to Century City. The obligations stay down, on the operating company. The fabric stores in Cleveland and Akron and St. Louis keep selling yarn and thread, never seeing the wires that move millions out of the company every quarter. In twenty eighteen the chain rebrands from Jo-Ann to JOANN, all capitals, to broaden its appeal to a younger crafting audience. New logo. New signage. Same debt. Then the pandemic arrives. Locked-down Americans, suddenly home, go on a sewing binge. Mask-making. Quilting. Embroidery. Joann's fiscal twenty twenty-one revenue spikes to two point eight billion dollars. EBITDA briefly approaches three hundred million. The stores cannot keep yarn in stock. Pattern books sell out. Leonard Green sees the window — a public-market exit, at the peak of a sales cycle that everyone in the room knows will not last.

March twelfth, twenty twenty-one. JOANN Incorporated lists on Nasdaq. Ticker JOAN. Initial public offering price: twelve dollars a share. Roughly half the proceeds flow back to Leonard Green and the company's existing private-equity holders through the secondary offering. Leonard Green retains a majority stake. The firm holds the right to nominate up to five members of the board. The chief executive presenting the company to public investors is Wade Miquelon, a former chief financial officer of Walgreens. Miquelon's pitch is simple. The pandemic crafting boom is structural. Joann is a post-pandemic craft champion. He is wrong. The pandemic crafting boom is not structural. It is a one-time spike. The moment Americans go back to offices, sales collapse. Same-store sales decline ten point seven percent in fiscal twenty twenty-two. The stock drops below seven dollars by year-end. It will never trade above twelve again.

Then the cost crunch arrives. Raw cotton prices surge. Polyester yarn surges. Import freight rates from Asia hit record highs. Container shipping from Shanghai to Los Angeles, which had cost fifteen hundred dollars before the pandemic, briefly exceeds twenty thousand. And the company is still carrying roughly one billion dollars of floating-rate term-loan debt from the original Leonard Green leveraged buyout. As the Federal Reserve raises interest rates seven times in twenty twenty-two, Joann's interest expense ramps from around sixty million dollars a year to over one hundred million. Cash flow turns negative. The board does not push back. The Leonard Green directors hold their seats. November twenty twenty-three: Joann reports a quarterly net loss of forty-one million dollars. Cash on hand: under twenty million. The independent auditors attach a going-concern doubt to the financial statements. In plain English: we do not believe this company can pay its bills for the next twelve months. The stock, once twelve dollars, trades for sixty-five cents.

March eighteenth, twenty twenty-four. JOANN Incorporated and nine subsidiaries file voluntary Chapter Eleven petitions in the United States Bankruptcy Court for the District of Delaware. Case number twenty-four bee kay one zero four one eight. Lead case JOANN Incorporated. The Honorable Craig T. Goldblatt presiding. The filing is prepackaged. Every major creditor has already signed off in advance. Joann's senior term lenders — led by funds advised by Eaton Vance and 1992 MSREF — agree to swap roughly five hundred and five million dollars of debt for new equity in the reorganized company. The same lenders commit one hundred and thirty-two million dollars in new debtor-in-possession financing. The chief executive signing the first-day declaration is Chris DiTullio, recently elevated from chief customer officer. The chief financial officer signing alongside him is Scott Sekella. Leonard Green's residual equity stake is wiped out on paper. So is every public shareholder who bought stock at the twelve-dollar IPO. Trade vendors holding unsecured claims — the small mills in the Carolinas, the button-makers in Ohio, the importers of Korean polyester thread — will receive cents on the dollar. The court approves emergency motions allowing the company to continue paying employee wages, honor customer gift cards, and accept coupons. Stores stay open during the proceedings. Operations continue. To the customer walking through the doors that spring, nothing visibly changes. The fabric is still there. The yarn is still there. The cashier still smiles.

April twenty-fifth, twenty twenty-four: Judge Goldblatt confirms the prepackaged plan from the bench. April thirtieth: the plan becomes effective. JOANN emerges as a private company controlled by its former term lenders. The press release calls it a fresh start. Total debt reduction: five hundred and five million dollars. Stores remaining: approximately eight hundred and fifty. Employees retained: nineteen thousand. Leonard Green and Partners — the firm that loaded the original billion dollars of debt onto the company in twenty eleven, that took the company public in twenty twenty-one and cashed out hundreds of millions in the secondary, that watched as floating interest rates crushed the operating margin — is gone from the cap table. No clawback. No civil claim. No criminal referral. The new owners — the lenders — inherit a chain with thin inventory, anxious vendors, exhausted store managers, and a customer base that has been watching for-sale signs in the windows for two years. They have nine months before everything collapses again.

January fifteenth, twenty twenty-five. JOANN Incorporated files a second voluntary Chapter Eleven petition. Same court, District of Delaware. The fresh start did not work. The new owners — the former term lenders, now equity holders — have neither the retail-operating expertise nor the patience for a craft-retail turnaround. The company's holiday twenty twenty-four sales miss by double digits. Vendors have been refusing shipments since November. Inventory at the stores is visibly thin. Customers walk in and walk back out. The chief executive at the second filing is Michael Prendergast, an Alvarez and Marsal restructuring partner brought in to manage the wind-down. The instructions to Prendergast are not to turn the company around. The instructions are to maximize recovery for the lender group. February twelfth, twenty twenty-five: an auction is held in New York under bankruptcy-court supervision. The winning bidder is GA Group — a liquidation-and-asset-disposition specialist also known as Great American Group, the same firm that handled the wind-downs of Toys R Us and Bed Bath and Beyond. GA Group submits its credit bid alongside Joann's term lenders. The plan is no longer a turnaround. The plan is a liquidation.

February twenty-third, twenty twenty-five. NPR confirms it. Joann will close all eight hundred stores by the end of May. Going-out-of-business sales begin within days. Aisles are stripped. Pegboards come off the walls. The bolts of fabric on the racks are themselves for sale. The fixtures are for sale. The shopping carts are for sale. The Cricut machines, the sewing machines, the holiday wreaths still in their boxes — for sale, by the pound. Long-time customers post farewell videos from inside the stores. Quilting guilds gather to clear out the last of the cotton prints. Sewing teachers buy out the last of the pattern catalogs for their classrooms. Store managers, many of them twenty-year veterans, do not know when their final paychecks will arrive. The Worker Adjustment and Retraining Notification filings — the federal sixty-day layoff disclosures — list nineteen thousand names across forty-nine states. May thirtieth, twenty twenty-five. The last Joann store — in suburban Cleveland, fifteen miles from the original Lakeshore Boulevard shop opened by the Reichs and the Rohrbachs in nineteen forty-three — locks its doors for the final time. Nineteen thousand employees are terminated. Eight hundred locations go dark. An eighty-one-year-old American institution, founded by two immigrant couples on a Cleveland boulevard, is gone.

The accounting is brutal. Lifetime extraction by Leonard Green and Partners through dividends, advisory fees, and the twenty twenty-one initial public offering secondary — by reasonable industry estimates, over three hundred million dollars. Lifetime contribution by Leonard Green to the operating health of the company: zero new product categories funded, zero new distribution centers built with their capital, zero strategic capital invested that the company did not borrow against itself to fund. Criminal charges against Leonard Green and Partners: zero. Civil claims by creditors and former shareholders: pending. Justin Zimmerman, the longtime crafting-community voice who covered the chain's collapse, summarized it: the company did not run out of customers. The company ran out of permission to keep them. The Reich daughter the chain was named after — Joan — passed away years before the second bankruptcy. The Rohrbach daughter — Jacqueline Ann — outlived the company. So did the original Lakeshore Boulevard storefront, repurposed into other small businesses. The fabric is gone. The buttons are gone. The thread is gone. The lights are out. The name still scrolls past on liquidation websites and bankruptcy dockets. And in Century City, in a quiet office with a calculator, the firm that owned it walks on to the next deal.