Ever since the Industrial Revolution, society has struggled to fully comprehend the crucial economic role that women—especially working mothers—play in the economy. This challenge has appeared across most industrializing economies, as the shift toward men and single women working in industrial jobs supplanted women’s earlier roles in the manufacturing of fabric and garments, as well as their vital role in managing family-owned farms and related businesses. As the industrial era shifted women away from business and manufacturing upon marriage, women continued to play a significant part in driving domestic consumption and managing household purchases and budgets.
Even as limits existed for women-owned and -operated businesses, numerous companies emerged that focused on women as key decision-makers and customers. Significant portions of the economy—especially department stores and mail-order catalogs—targeted women as the principal drivers in family financial decisions and key consumers.
As women returned to the workforce in large numbers in the 1970s, they finally gained the legal right in the United States to have their own credit cards in 1974, which also opened up greater opportunities in business ownership and entrepreneurship. However, the number of female fund managers, venture capitalists, and bankers has continued to lag behind the representation of women in the business and finance sectors. The key impacts of these issues on investing were examined in the September Milken Institute publication, The Missing Billions: Analyzing the Impact of Women-Led Fund Managers . But the issue of access to capital for women is part of a larger issue that has resurfaced over the past two decades. Just as important during this time has been a recurring pattern of consistently underestimating and misunderstanding the market for businesses that are particularly focused on women, not only from a retail perspective, but also as small business owners and entrepreneurs. At the same time, businesses that traditionally targeted women as key consumers, such as department stores, craft stores, women’s clothing stores, and family goods retailers, have all experienced a significant decline in the marketplace, whether due to online competition, management decisions, or both.
The bankruptcy of JOANN Fabrics and its subsequent liquidation in the first half of 2025 marked a clear example of squandering what should have been a dominant market position in pursuit of short-term growth. This was driven by a lack of understanding of both the consumer market and the needs of the primarily women-owned businesses that had come to depend on JOANN Fabrics as the key supplier not only of fabrics and patterns, but also of numerous other essential products and tools crucial to their businesses. Ironically, this dominant position left JOANN more vulnerable, as its owners no longer felt the need to understand their customer base due to a lack of significant competition, especially as the only other remaining possible rivals, Michael’s and Hobby Lobby, specialized in other specific markets such as collectibles and non-fabric crafts. In fact, Hobby Lobby was able to improve its own position relative to JOANN by understanding its own customer base and avoiding overlap with JOANN.
In many ways, the bankruptcy and collapse of JOANN have significant parallels to the 2017 bankruptcy of Toys “R” Us. In both cases, key drivers were acquisitions by management firms that loaded the companies with debt based on projected growth models, without fully understanding the factors that gave the companies their dominant position in the marketplace or recognizing that further growth was unlikely given the circumstances. While both companies faced significant competition, particularly online, the larger issue was confusing a dominant position in selling to women who depended on the companies for specific supplies and reliable physical stock (and the consequent need for capital going to suppliers), with a drive for growth and efficiency that undercut their positions in the marketplace. The largest single factor in Toys “R” Us’ financial decline was the company’s dependence on its Babies “R” Us subsidiary to drive growth in sales and products. But Babies R’ Us, which had driven a major increase in sales throughout the early 2000s for its parent company, was necessarily dependent on a growth in the number of children being born in the US. As demographics caught up to Babies “R” Us, as well as numerous other children’s and family-focused stores such as Children’s Place, the entire sector went into decline, taking Toys “R” Us with it. It is telling that, as Toys “R” Us is gradually being relaunched, it explicitly does not include any of the maternity and baby products that had driven its growth for so many years.
So, what makes JOANN’s bankruptcy and liquidation so different from the loss of numerous other companies that focused on women as customers? The answer largely lies in the wave of consolidation that led to JOANN’s dominant position in the marketplace, making it the principal supplier of fabrics and tools for thousands of women who used these supplies to operate small, home-based businesses. As significant numbers of working mothers have sought to supplement family incomes from home or rejoin the workforce while facing childcare issues, JOANN represented a key resource for many aspiring small-business owners selling clothing, crafts, and numerous other artisan products, either in-person or through online marketplaces. One of the main reasons that having a physical brick-and-mortar presence was so essential in thousands of communities around the country is the need to physically assess products such as fabric, thread, yarn, and trim in person to ensure that dye lots and colors match, and that the products meet the required specifications. Doing so through online vendors results in significant limitations, mismatches, and other delays and costs that can be brutal for small independent business owners. As JOANN went through its period of expansion, acquiring numerous other competitors, it became an indispensable part of the supply chain for a large and often overlooked portion of the economy.
If JOANN had been viewed by executives who understood the women and men who made up its customer base, it would have easily fended off online competition by leveraging its physical locations as a significant asset. Instead, management failed to understand its customer base, cut staff in stores who could retrieve and cut fabric, and streamlined rather than built on its tremendous comparative advantages, resulting in the March 2025 bankruptcy. The subsequent rapid rush into liquidation came not only due to the massive debt, but also because the company had damaged its relationship with suppliers and, consequently, its own reputation with customers along the way.
Among the most affected victims of the JOANN closure was Design Group America, owner of the four major clothing-patterning brands (Simplicity, McCalls, Vogue, and Butterick), whose histories trace back nearly 200 years, and whose retail presence relied on JOANN as a physical location for their products. There is one bit of good news, however—the assets were rescued by an investor in Rubelmann Capital, who brought back a long-time female executive, Abbie Small, who actually knows and understands the company’s customers. It may be too late to rescue all of JOANN Fabrics, but the need for investors and companies who understand and recognize the tremendous value of women as both home and business customers remains.
