Print JOANN Fabric and Crafts shut their doors permanently on the company. On May 27, 2025, customers lined up for the final day of a store closing sale in a Torrance, California shopping mall, signaling an end to an era that lasted almost four decades. The closure follows the company’s recent bankruptcy filing, highlighting ongoing struggles in the retail sector amid a contracting U.S. economy. The most recent report from the Federal Reserve’s Beige Book confirms a historically steep contraction in economic activity just in the last month and a half. Inflation is driving up prices and slowing hiring, compounding the crisis.
The store closing sale became a magnet for would-be shoppers excited by the prospect of getting a deal before the shelves ran dry. Shoppers reported a new surge of sadness flooding over them. Little did they realize they were documenting the closing hours of one of their favorite hometown craft store. JOANN’s bankruptcy adds to crumbling wave affecting retailers as economic indicators become increasingly problematic pointing to a slowdown in consumer spending.
The Federal Reserve’s Beige Book reported that demand for labor fell in every single district. Yet, workers experienced less hours overall, along with loss of available overtime. Hiring overall in most of the Fed’s 12 districts was described as “little changed,” with the seven districts listing employment as stagnant. This stagnation occurred at a time when most of the country was experiencing an influx of job seekers and decreased turnover, suggesting a much more competitive labor market.
Fears about rising prices due to tariffs have added to the economic turmoil. The Beige Book reported increased concerns by consumers and businesses as they started to experience increased costs of production. New York’s district specifically reported that input prices “grew strongly with tariff-inducted cost increases.”
“Contacts that plan to pass along tariff-related costs expect to do so within three months” – The report
The report highlighted that there were “widespread reports of contacts expecting costs and prices to rise at a faster rate going forward.” Economic conditions have prompted some districts to outline staff reduction plans and hiring pauses, further illustrating the struggles faced by businesses.
The largest operator of specialty craft stores, JOANN Fabric and Crafts, just filed for bankruptcy. This unfortunate decision illustrates the great strides the retail industry has made throughout these tumultuous economic times. Together, these changes portend serious consequences for the future of consumer spending and job growth. As companies face a new era of more intense disruption, the question is not if, but how they’ll respond.