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Fortune
Fortune
Lila MacLellan

How Joann Fabrics went from a cult-favorite retail darling to a bankruptcy disaster

Scissors cut through the Joann logo (Credit: Illustration by Fortune; Images by Getty; Tetra Images, Ken Wiedemann, fotograzia, Kinga Krzeminska, ChiccoDodiFC, Daniel Acker/Bloomberg via Getty Images, MirageC, FreshSplash)

Everything is on sale at a Joann's store just north of New York City.

In the sewing section, some shopping carts have all but disappeared under bolts of cotton, tulle, and fleece. But the mood is hardly festive. The busy atmosphere and steep discounts are signs of a sad ending for a beloved institution. Or, as one dark-haired young shopper puts it: "It's a bummer.” 

Last month, Joann Fabric and Crafts, a fixture of American shopping for generations, announced it would close all of its more than 800 stores in the U.S. and lay off 19,000 workers, including more than 15,000 part-time store associates. The company is in the midst of its second bankruptcy in less than a year. 

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