JoAnn Fabrics, which operated approximately 800 stores across the United States before closing, was declared bankrupt in 2025 after being acquired by private equity investor Leonard Green & Partners. The chain, which originated as a Cleveland-based store founded by German immigrants in the 1940s, had generated over $2 billion in annual revenue during its strongest years. Beyond its primary function as a retail outlet, the store served as a communal hub for small business operators including wedding dress manufacturers, upholsterers, hat makers, and repair specialists.
In response to the chain’s closure, Sandy McClenahan, a legal assistant and hat maker, has initiated efforts to recreate JoAnn’s community-focused model through a member-owned and worker-owned cooperative structure. McClenahan published a survey proposing a craft and fabric cooperative owned collectively by members, which generated hundreds of responses including interest from individuals across all 50 states and approximately 30 people expressing willingness to serve as founding members. The proposed cooperative would extend beyond simply selling fabrics to encompass support for independently owned businesses and preservation of specialized craft skills.
Cooperative business models have demonstrated growth across the United States as alternatives to traditional corporate structures. Worker-backed cooperatives more than doubled from 315 firms in 2014 to 820 in 2024, while approximately 30,000 cooperatives operate nationwide, including established entities such as REI, Ace Hardware, and Land O’Lakes. Federal legislation passed on 16 September is anticipated to facilitate the formation of additional employee stock ownership plans, which currently exist in over 6,400 companies.
Demographic shifts are expected to accelerate the cooperative movement’s expansion. Approximately 40 percent of United States small businesses are owned by baby boomers who are approaching retirement age, with McKinsey estimating a transfer of roughly $5 trillion in small business assets. Industry observers and academic institutions have begun recommending cooperative structures as alternatives to private equity acquisition for retiring business owners seeking to preserve their companies’ legacies and community relationships. Ward’s Lumber in upstate New York represents a recent successful transition to cooperative ownership, maintaining local economic benefits and community accessibility.
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