Joann is back from the dead, but now inside Michaels stores

The once-popular, now bankrupt fabric store, Joann, is being resurrected by its previous competitor Michaels.

Michaels has introduced a new corner in its many outlets called the Knit & Sew Shop, which will use Joann’s branding and popular products. It is also introducing a new section to some stores for party goods.

The company said the expansion makes it North America’s largest specialty fabric and party retailer. The new additions are already available in 840 stores and will expand to an additional 250 locations in the coming months.

The new sections are a “transformative step forward on our mission to become the go-to destination for fueling creativity and celebration,” David Boone, Michaels’ chief executive officer, said in a news release.

The Knit & Sew Shop will feature Joann signage and some of its Joann-specific brands, like the fan-favorite Big Twist yarn. In addition to selling threads and fabric, the shop will include new in-store services, like fabric cutting.

In June, Michaels purchased Joann’s intellectual property and private label brands.

The party supplies section at Michaels offers an expanded selection of party supplies and a balloon bar. Items like themed tableware, paper goods and decorations will also be available.

Michaels is betting that with fewer specialty shops like Joann and party supply retailer Party City, there is a market opportunity.

In January, Joann filed for bankruptcy, citing lower sales and an inventory shortage. It led to the closing of all its stores. Party City, which was similarly struggling with debt, rising costs and demand, had to shutter all its locations in 2024.

Michaels was founded in 1973 and is owned by private equity firm Apollo Global Management.

It operates 1,300 stores in North America and is headquartered in Irving, Texas.

The chain is anticipating a busy holiday season. It recently announced it is looking to take on 10,000 additional seasonal hires.