Sewing Retailer Joann Goes Seamless With Nearly 200 Pct Jump In Omnichannel Sales

Just three weeks after its initial public offering (IPO), sewing and arts and crafts retailer Joann said its same-store sales rose 21 percent for the three months ending Jan. 30, while its omnichannel revenues jumped 194 percent, albeit down from the 350 percent digital growth it posted in Q3.

The earnings report from the specialty retailer formerly known as Joann Stores not only crystalized its return to the public market but also marked the first time in a decade that the Ohio-based operator of 850 stores in 49 states has given investors a look at its books.

Although no analyst estimates for Joann have been published yet, the company’s solid sales growth and digital transformation progress are sure to draw investor attention, especially since rival Michaels Stores is in the process of going private via a $5 billion buyout announced in early March by the Apollo Group.

For now Joann is the market leader in the sewing and fabric segment and claims to be among the fastest growing competitors on the arts and crafts front, a category that has seen record growth during the pandemic era’s stay-at-home boom in hobbies and handmade goods.

“We are extremely pleased with our strong performance in 2020, which is a true testament to the resiliency, flexibility and dedication of our passionate employees across our entire organization,” said Joann President and CEO Wade Miquelon, saying the company’s unwavering focus was nothing short of amazing in an unprecedented year.

Old Store, New Trend

With a nearly 80-year track record since its founding in 1943, Joann has lived through its share of boom-and-bust cycles, although in the midst of the current COVID crisis the company did not offer any financial guidance for the current quarter or full year.

That said, the company did return to profitability, and posted Q4 net income of $38.3 million compared to a write-off laden year ago quarterly loss of $358 million.

For Q4, Joann said its sales increased approximately 21 percent to $841 million, 16 percent of which came from its enhanced omnichannel offerings. Said another way, Joann relied on its  traditional brick-and-mortar stores for 84 percent of revenue, an imbalance the company is working to address.

“We have been on a journey as a company for the past several years to transform Joann from a traditional retailer to a fully-integrated, digitally-focused provider of creative products,” Miquelon said last month as the company priced its offering at $12 per share. “What has stayed true throughout our history is our founding mission — to inspire creativity in everyone, from our customers to ourselves, spanning across all skill levels and project interests.”

Joann also said it reduced its debt by 35 percent and trimmed inventory levels by 14 percent.