Dave Rahardja<p>Another familiar <a href="https://sfba.social/tags/PrivateEquity" class="mention hashtag" rel="nofollow noopener noreferrer" target="_blank">#<span>PrivateEquity</span></a> story (please double check my claims):</p><p>1. Publicly-traded Jo-Ann Fabrics was bought out by Private Equity firm Leonard Green & Partners in 2010, with close to ZERO DEBT (<a href="https://www.cleveland.com/business/2010/12/jo-ann_stores_going_private_in.html" rel="nofollow noopener noreferrer" translate="no" target="_blank"><span class="invisible">https://www.</span><span class="ellipsis">cleveland.com/business/2010/12</span><span class="invisible">/jo-ann_stores_going_private_in.html</span></a>).</p><p>2. Jo-Ann then went public again in 2021, now saddled with $930M in debt (<a href="https://www.forbes.com/sites/joanverdon/2021/02/16/stitch-pitch-fabric-and-crafts-retailer-joann-files-for-ipo/" rel="nofollow noopener noreferrer" translate="no" target="_blank"><span class="invisible">https://www.</span><span class="ellipsis">forbes.com/sites/joanverdon/20</span><span class="invisible">21/02/16/stitch-pitch-fabric-and-crafts-retailer-joann-files-for-ipo/</span></a>). In short, the private equity firm loaded them up with nearly A BILLION DOLLARS IN DEBT.</p><p>3. Jo-Ann stocks steadily declined over the next few years.</p><p>4. Jo-Ann declared bankruptcy in 2024, still with a $1B in debt on the books, and emerged as a private company, after restructuring their debt to $500M (<a href="https://apnews.com/article/joann-closing-bankruptcy-crafts-retail-b83c68fb641fad18cd6c8be925c6d90b" rel="nofollow noopener noreferrer" translate="no" target="_blank"><span class="invisible">https://</span><span class="ellipsis">apnews.com/article/joann-closi</span><span class="invisible">ng-bankruptcy-crafts-retail-b83c68fb641fad18cd6c8be925c6d90b</span></a>).</p><p>5. Jo-Ann announced they will close all stores in 2025 (<a href="https://www.usatoday.com/story/money/2025/01/16/joann-fabrics-bankruptcy-closing/77748650007/" rel="nofollow noopener noreferrer" translate="no" target="_blank"><span class="invisible">https://www.</span><span class="ellipsis">usatoday.com/story/money/2025/</span><span class="invisible">01/16/joann-fabrics-bankruptcy-closing/77748650007/</span></a>).</p><p>This sounds like the same playbook that took down Red Lobster: Take a company with no debt, saddle it with enormous amounts of debt (no doubt held by its new owners), bleed them dry by extracting significant interest on said debt, then shut everything down and liquidate.</p>