During the COVID-19 lockdowns, people confined to their homes kept busy with crafts and other related projects and some individuals even started new businesses.
If you’ve considered investing in a company that would benefit from people working from home, then you might want to check out Jo-Ann Fabrics.
Keep reading to find out how you can buy stock in Jo-Ann Fabrics and how to buy stocks from other companies when they go public. JOANN Fabric, though, its not a new company, but it is new to the stock market. Unlike technology companies, JOANN has a target audience that has always been easy to pinpoint, and capital from investors will help these stores grow beyond their original missions.
When Did JOAN IPO?
Jo-Ann Fabrics, LLC IPOed on March 12, 2021.
Jo-Ann Fabrics Financial History
Original storefront for first Jo-Ann Fabrics store in Cleveland, Ohio. Source: Jo-Ann Fabric and Craft Stores’ YouTube channel.
Based in Hudson, Ohio, Jo-Ann Fabrics has been in business for over 75 years as a fabrics and crafts retail chain. The company recently announced its plans to go public when it filed for an IPO on February 16, 2021.
Jo-Ann Fabrics has grown significantly since its founding in a single storefront in Cleveland, Ohio, eventually becoming the nation’s leader in the sewing business and controlling as much as a third of the entire market. The arts and crafts retailer currently operates 855 physical stores in 49 states, as well as an active e-commerce business.
The company originally went public in 1969 as Fabri-Centers of America, although it was later taken private by Leonard Green & Partners in a $1.6 billion deal in 2011. This left the company with a large debt liability, and financial instruments such as a stock may have helped alleviate the strain.
In 2017, Jo-Ann’s Chief Executive Officer Wade Miquelon began transforming the privately owned company into a digital omnichannel platform. The company used the Salesforce Commerce Cloud to build its own apps and compile an email list of over 16 million customers. The company also hosts a subscription service called Creativebug that has over 150,000 monthly paid users.
The terms of the Jo-Ann Fabrics IPO involved raising approximately $175 million via an offer of 10.9 million shares with 50% of the shares to be allocated to insiders. The approximate pricing of the shares was disclosed on March 4 with a stated price range of $15 to $17 per share.
The $16 per share midpoint of the offering price range would give the company a fully diluted market value of $679 million. The decision to issue stock came after the company saw its sales jump by +24.3% to $1.921 billion in the first 9 months of 2020. Ultimately, the stock debuted at $12 per share, allowing investors to include additional shares in an already diversified portfolio. Or, you can purchase this stock as your first foray into the retail world.
The underwriters for the offering include Credit Suisse, Bank of America Securities, Guggenheim Securities, Barclays, Wells Fargo Securities, Piper Sandler Companies and William Blair & Co.
A modern Jo-Ann Fabrics store. Source: Jo-Ann.com
Jo-Ann Fabrics Potential
Jo-Ann Fabrics currently classifies as a fabric, craft and sewing supply store, with a market size of just $3.6 billion. On the plus side, the company currently has a 3rd of the entire sewing market in the United States and seeks to present itself as a key part of the $40 billion creative products market.
While the latest revenue numbers that sparked the idea of an IPO displayed growth of +24.3% in the 39 weeks ended on October 31, the previous full year’s results showed the company’s revenue fell by -3.6%. Also, while gross profits increased by +25.1% in the latest period, they had fallen by -6.1% in the full year ending February 1, 2020.
Jo-Ann Fabrics ultimately raised $131 million after selling 10.9 million shares at $12 per share.
According to the company’s management, they intend to use the proceeds of the offering for general corporate purposes. Jo-Ann gave no indication of using the proceeds to pay down some of the company’s sizable debt.
How to Buy Jo-Ann Fabrics (JOAN) Stock
Just follow these steps to get set up to buy Jo-Ann Fabrics (NASDAQ: JOAN) stock:
- Pick a brokerage.
Choose the brokerage you believe provides you with the best customer service, pricing and account options. If you’re new to investing, you can choose from Benzinga’s list of favored brokers:
• TD Ameritrade
• Charles Schwab
- Decide how many shares you want.
Depending on your budget and how you prefer to construct your portfolio, you can choose how many shares to buy, when to buy and if you prefer to invest more in the future.
- Choose your order type.
You can choose a simple market order, or you might enter bracket orders, stop-loss orders, stop-limit orders, etc.
- Execute your trade.
Simply execute your trade and check the dashboard to see the results of your activity.
Best Online Stock Brokers
Below are some of the best brokers to get you started.
Is the Jo-Ann Fabrics (JOAN) Stock for You?
Jo-Ann Fabrics is a unique retailer that provides its customers with the tools they need to sew, craft, create and much more. Is this stock for you? Entering the retail sector is a good idea if the economy is strong, or you can make your retail holdings more robust by tapping into JOAN as a preferred stock.