Michaels completes purchase of fabric seller Joann’s brands

What Chapter 11 bankruptcy means

Filing for bankruptcy doesn't always mean the end for an American business.

The Michaels Companies announced Thursday that it has completed its purchase of Joann’s intellectual property and private label brands.

Michaels buys Joann’s intellectual property, brands

What we know:

Michaels on Thursday said that its purchase of Joann's IP and private brands included the acquisition of "Big Twist" yarns, which had become a staple in Joann stores over the years.

Those "Big Twist" labels are now being developed as part of Michaels' portfolio — and will be available in-stores and online later this year, the company said. In the meantime, Michaels has also dedicated a landing page to welcome former Joann customers online.

Michaels store. (Credit: Artur Widak/NurPhoto via Getty Images)

And as part of its overall expansion into fabrics, Michaels said on Thursday that its adding more than 600 new products from new and existing brands — including quilting supplies and fabrics, specialty threads, sewing machines and more.

What we don't know:

Financial terms of the acquisition were not disclosed. 

What they're saying:

"We’re honored to have the opportunity to welcome JOANN customers into our creative community and are committed to delivering the selection, value, and inspiration they are looking for at Michaels," Michaels CEO David Boone said in a statement. 

The deal, he added, allows the company to better "respond to rising demand" among both new and existing customers.

Joann bankruptcy 

The backstory:

The company, which was founded back in 1943, previously went private in 2011 — when it was purchased by equity firm Leonard Green & Partners for about $1.6 billion.

A decade later Joann, still majority owned by Leonard Green & Partners, went public in an initial public offering at $12 a share.

Joann grew into a destination for generations of sewers, quilters, knitters and lovers of other crafts for more than 80 years. 

But more recently, operational challenges continued to pile up — with the retailer pointing to sluggish consumer demand, inventory shortages and rising competition.

RELATED: Joann, the fabrics and crafts chain, files for bankruptcy

Joann announced it would be going out of business back in February, just one month after filing for Chapter 11 bankruptcy protection for the second time within a year. At the time, the company said financial services company GA Group, together with Joann’s term lenders, had been selected as the winning bidder to "acquire substantially all of Joann’s assets" and conduct going-out-of-business sales at all store locations.

Michaels, founded in 1973, currently operates 1,300 stores across 49 U.S. states and Canada. Its parent company also owns Artistree, a framing merchandise manufacturer.