After more than 80 years in business, Joann (formerly known as Jo-Ann Fabrics), a nationwide chain selling fabric and craft supplies, has announced it is closing all of its stores. The chain has approximately 800 stores in 49 states. The announcement comes after filing for bankruptcy twice in one year. After the first bankruptcy, the chain attempted to reorganize and restructure to remain in business. However, when that didn’t work, the company was sold off and the new owners are planning to hold liquidation sales to offload the remaining inventory and assets.

After losing significant market share to online retailers and its other long-time competitors, Michaels and Hobby Lobby, the chain attempted to downsize. The initial plan was to close 60 percent of its stores and focus on making the remaining locations profitable. Instead, a year later, it decided to throw in the towel all together.

Discussion Questions:

  1. Which variables in a Joann store would be considered fixed and which would be
    considered variable?
  2. At what point does a firm decide to close down completely?