Straight Talkin' on Joann's Shiftin' Strategy
Restructuring initiates at Joann, resulting in employee redundancies.
Got a bone to pick with Joann, the crafty retailer that's been weavin' its way through the retail landscape for ages? They recently spilled the beans about a corporate shakeup, and it ain't lookin' pretty for some poor souls who've been workin' there.
Wednesday saw Joann dumpin' some positions from several departments, doin' a restructure on their operations both in the field and at HQ. They wouldn't cough up details, like how many folks got the axe or if there's any fancy severance packages on the table. They also kept quiet about which departments got hit hardest.
This news comes hot on the heels of the retailer's CEO hangin' up the reins a few months back and about two weeks after they spilled their Q2 earnings. In Q2, their e-commerce sales inched up 3%, but their net sales dropped by 2.1% to a measly $453.8 million year over year.
Joann's apparently been on a mission to tighten its belt and beef up profits, given they've reportedly been sealin' deals with suppliers to bag $60 million in product cost savings this year. They're aimin' to slash supply chain, product, and corporate costs by a whopping $200 million in total.
Back in January, Joann boasted about employin' around 22,000 workers, spread across full-time, part-time, seasonal, and temp gig roles. They also owned around 829 stores in 49 states as of late August.
Despite the rocky retail waters, Chris DiTullio, their Chief Customer Officer, is waxin' optimistic. Durin' an Aug. 28 earnings call, DiTullio reckoned they're on the right track to meet their annual profit targets, thanks to those cost-cuttin' initiatives and the sales momentum they've been seein'.
With their former CEO Wade Miquelon retirin' back in May, DiTullio and Scott Sekella, the CFO, are steppin' in as interim co-leaders of the Office of the CEO.
Sekella chimed in durin' the earnings call, sayin' they're seein' a healthy lift in sales for their core textiles-related sewin' and craft businesses. This includes a positive trend in their sewin' tech category, which they believe could bode well for other categories in the future.
Joann reported a Q2 net loss of $73.3 million, which was up from $56.9 million the year before. Their long-term debt stood at nearly $1.1 billion as of July 29, and they're expectin' net sales to dip between 1% and 3% for the year.
Joann's been transparent about a few other challenges they're facin'. In an Aug. 31 securities filing, they admitted they're currently out of compliance with Nasdaq's continued listin' requirements, raisin' fears of delistin', which could mess with their stock price, liquidity, and ability to secure future investments.
As the holly jolly holiday season approaches, Joann announced plans back in August to recruit more than 5,000 seasonal team members. When Retail Dive reached out to ask if they're still greenlightin' these holiday hires, they remained tight-lipped.
Diggin' up more details about Joann's cost-savin' measures, earnings, and layoffs from 2022 might require jumpin' through some financial reports or press releases, or maybe--just maybe--contactin' their investor relations department directly. Good luck!
- Joann's strategic shift might involve leveraging technology to update their e-commerce platform and AI for customer insights, aiming to boost sales and meet annual profit targets.
- As part of the cost-cutting measures, Joann may consider investing in environment-friendly initiatives to improve the health of their business in the long run.
- With the ongoing corporate restructure, it is essential to analyze the potential impact of the layoffs on local communities and the environment, as well as the implications for the business's social responsibility.
- In the face of challenging financial times for Joann, the war for market share and customer loyalty intensifies in the retail sector, and other businesses should monitor their strategies carefully. Finance and business experts may want to assess the ripple effects these changes might have on the retail industry as a whole.
