JoAnn Fabrics, an 800-store chain with roots tracing to a Cleveland, Ohio store founded by German immigrants in the 1940s, ceased operations after being acquired by private equity firm Leonard Green & Partners, becoming one of hundreds of US companies bankrupted by such investors. The closure has prompted dedicated customers and crafting enthusiasts to explore alternative business models to restore the community and commercial ecosystem the chain provided for small business owners including seamstresses, upholsterers, milliners and repair specialists.
Sandy McClenahan, a legal assistant and hat maker, has begun surveying interest in creating a member-owned and worker-owned cooperative to replace JoAnn’s retail and community functions. A survey published last month drew responses from individuals across all US states, with 30 expressing interest in serving as founding members. Rather than simply replicating a traditional fabric retailer, the proposed cooperative would aim to support individually owned craft businesses and preserve specialized skills while preventing consolidation by private equity operators.
Cooperative business models are experiencing measurable growth in the United States, according to industry specialists. Worker-backed cooperatives more than doubled from 315 firms in 2014 to 820 in 2024, while the broader cooperative sector encompasses approximately 30,000 entities including established brands such as REI, Ace Hardware and Land O’Lakes. Employee stock ownership plans have also gained momentum after years of stagnation, with over 6,400 companies currently offering such arrangements, supported by recent federal legislation designed to facilitate formation of additional employee-owned enterprises.
Demographic shifts are expected to accelerate the cooperative movement’s expansion. Approximately 40 percent of US small businesses are owned by baby boomers now approaching retirement, with estimates suggesting approximately $5 trillion in small business assets will transfer ownership in coming years. Private equity investors are actively acquiring retiring owners’ businesses, though advocates including Harvard Business School are encouraging business owners to consider cooperative conversions that would maintain local roots and community benefits. Recent examples including Ward’s Lumber in upstate New York demonstrate the viability of cooperative transitions for small enterprises seeking to preserve their legacy and community impact beyond private ownership.
Article Attribution | Read More at Article Source
Article summary produced by Claude AI