How did Joann Fabrics die while Best Buy survived? It wasn't Amazon

2/23/2026 at 4:06:48 PM

We really need a ban on leveraged buyouts where the leverage becomes the responsibility of the purchased entity. You shouldn't be able to borrow money to buy a company, then transfer the debt used to buy the company on to the company itself. Any theoretical arguments about why this is OK or a good idea should fall silent against the repeated observations of what happens in practice and the observable incentive structure created.

by jerf

2/23/2026 at 4:16:08 PM

Yes that interest shouldn't be tax deductable. The limit on share buybacks being expensible needs to return at least for these leveraged buyouts. And debt aquired for leveraged buyouts and debt used for share repurchase needs to be moved far down the bankruptcy priority tree.

by Projectiboga

2/23/2026 at 4:44:47 PM

Leveraged buyouts (vulture capital) is almost always an example of ... well, vultures.

The company is already walking dead; they're just feasting on the corpse. Left alone they'd peter out faster.

by bombcar

2/23/2026 at 9:25:01 PM

TFA makes a strong argument that that isn't the case.

I would say it's even the thesis of the article. Joann Fabrics was a healthy company with customer demand and zero debt and was basically assassinated by a leveraged buyout.

by harpiaharpyja

2/23/2026 at 6:49:58 PM

> The company is already walking dead; they're just feasting on the corpse. Left alone they'd peter out faster.

Is that actually true, or just a story used to justify the bad actions? There are a lot of meme-stories like the latter, floating to justify all kinds of money-making behavior. People with money have the resources to plant them.

by palmotea

2/23/2026 at 7:20:08 PM

It's true in at least some of the famous cases (perhaps not this one; perhaps not Nabisco) - but you have to do deep digging into the financials to see it, a moribund company and a salvageable one often look quite similar from the outside.

One way to tell is if the company does not emerge from bankruptcy but instead liquidates - it was probably already dead.

by bombcar

2/23/2026 at 9:44:47 PM

Like the entire libertarian party propaganda of the 50s

by whattheheckheck

2/23/2026 at 10:01:13 PM

that's the standard agit-prop of the right for the last 80, brah

by red-iron-pine

2/23/2026 at 4:57:52 PM

TFA explains that's not actually the case, not just an assertion, but actual studies that backed it up.

by bigbuppo

2/23/2026 at 4:52:35 PM

Except that Jo-Ann Fabrics was most definitely not walking dead when it was LBO'ed. I'd call this one vampire capitalism rather than vulture.

by flyinghamster

2/23/2026 at 6:56:50 PM

Except that the vulture capitalists definition of walking dead also includes companies that are profitable and healthy but not perpetually expanding and multiplying revenue every year. God forbid a company grow, reach some sort of local cap on size, then just comfortably exist to deliver a good service without trying to extract everything it possibly can from every customer. That's not walking dead and if all of the companies in the US were satisfied doing that this would be a much better country to live in.

by thatguy0900

2/23/2026 at 4:40:54 PM

This is a private transaction, for the profit of the banks providing the money to perform the buyout.

The banks are betting that the company/brand, once stripped of any valuable assets and being stretched to painful profitability at the cost of its reputation, will last long enough, with enough assets left at bankruptcy, that their high-interest, high-priority debt will be more than repaid.

If the private equity buys a firm in a leveraged buyout, sells off all its assets in a week, and shuts down immediately, it's the banks that get stiffed; The banks aren't idiots.

If you for some reason prioritize long-term survival & good/service provision of the ailing business, you need to take a bite out of the banks funding private equity takeovers that hit chapter 11 ("reorganization bankruptcy") or deprioritize their debt in chapter 7 ("liquidation bankruptcy") to disincentivize them providing funds.

There are certain shenanigans with private equity related to valuation and compensation ("My company is worth $1000, so I'm awarding myself 50% shares as part of a tax exempt retirement plan") that should be not just outlawed, but which should cause the IRS to send a CPA to go back and slap them in the face with a wet trout for having the fucking gall.

The cycle of enshittification that private equity often participates in, is less a problem with the fact of private equity, and more a problem with the giant piles of money in the finance industry growing much larger and taller than the economy they are theoretically structurally resting on. A problem with financialization and wealth inequality itself, with the system designed for upwards wealth redistribution, trying to transfer the last 10% of the world's money (which the poor are using as their medium of exchange) into the same dragon's hoard that has the rest.

by mapt

2/23/2026 at 4:35:41 PM

Who is the lender in this deal? Why would they agree to this transfer of debt? Like...if I buy a house with 20% down and then create an LLC and want to transfer the house to the LLC, the bank is not going to approve. Because there's no assets in the LLC to come after in the case of the mortgage being underwater.

by KPGv2

2/23/2026 at 4:30:58 PM

> You shouldn't be able to borrow money to buy a company, then transfer the debt used to buy the company on to the company itself.

Why not and how would you stop? It’s no different than a company issuing bonds to buy back its own equity.

I agree that it’s contributing to the enshitification of many end consumer industries, but I’m not sure what such a “ban” would look like it practice.

by koolba

2/23/2026 at 5:07:34 PM

Many things far more complicated than this have been made illegal.

And yes, people will try to wiggle around it. That's what regulatory agencies are for. Yeah, they don't 100% work. Believe me, you're unlikely to out-cynic me.

It should still be illegal.

by jerf

2/23/2026 at 4:49:17 PM

> It’s no different than a company issuing bonds to buy back its own equity.

Which was illegal until 1982 and could be made illegal again.

by HWR_14

2/23/2026 at 5:07:26 PM

A firm can be capitalized by debt or equity. They can have a public offering to and sell share to retire debt. They can issue bonds and use the money to buy back shares. There shouldn't be a moral component to this.

That being said, it seems criminal to take an enormous management fee while sending a company into bankruptcy.

by JackFr

2/23/2026 at 7:13:43 PM

In practice, a "ban" consists of personal loan guarantees of a certain percentage thereby limiting the frequency and magnitude of this sort of financing.

Essentially, that means some amount of corporate risk is leveraged upon the principal investors.

This is common practice in the EU for so-called "club deals".

by calmbonsai

2/23/2026 at 4:36:17 PM

It really does feel like the onus is on the original lender (who owns the debt) to police how it gets transferred.

by KPGv2

2/23/2026 at 4:12:19 PM

Our Best Buy is great. Usually pretty good stock and good variety. People there seem to be pretty nice as well. Bought a laptop there a few weeks ago. The one I wanted was in stock, they had a good price and gave me a fair trade in for my old one. Wife loves the place too as she can try on all their phone cases before she buys. It’s great to have a local option so that is one of the reasons I also choose to support them.

by roamerz

2/23/2026 at 4:26:07 PM

Best Buy price matches Amazon, I get what I want same day, no need to pay a monthly fee for "free" shipping. I used to browse Amazon for reviews (hoping at least some weren't fake) then buy in the real world in person, but now that Amazon is replacing access to reviews with AI summaries (there's a login barrier to see more than the first few) there's no need to go there at all.

by gdulli

2/23/2026 at 5:04:14 PM

I have a similar experience at my local Best Buy stores. I buy most of my electronics from there because I can't trust Amazon to give me a product that isn't counterfeit or defective to some degree. In general I largely prefer to buy things in person these days than have it shipped. No more Prime.

by y-c-o-m-b

2/23/2026 at 8:33:05 PM

Just be careful with BB when buying some products, like external hard drives. There are many stories on r/datahoarder from people buying HDDs only to plug them in and find the previous buyer has swapped out the drive, resealed it and returned it.

by qingcharles

2/23/2026 at 8:16:28 PM

Yes, it's the same reason that I recommend people just buy stuff from Costco if they have the item.

A buyer at Best Buy or Costco explicitly made a decision to stock the item at the store/warehouse, where shelf space is not free. If that item has a lot of returns or complaints, the store will stop selling the product. It takes up space where a better product could be, and returns waste the time of employees.

Amazon doesn't have these controls. Listing an item on Amazon is cheap and Amazon has no incentive to prune their marketplace of junk. The only controls on Amazon are user reviews which can be gamed.

by jerlam

2/23/2026 at 5:16:05 PM

I stopped patronizing Best Buy when their store phone numbers started going to a corporate call center that couldn't tell me if something I was looking for was in stock at the store.

by jmholla

2/23/2026 at 6:22:50 PM

They do show stock on their website. For other things such as price matching their chat service has worked well for me and seems to be backed by real people. I can't remember the last time I tried to call in.

by roamerz

2/23/2026 at 4:22:44 PM

I've had a similar experience with the Best Buy in my area. They also seem to be really good about keeping things in stock that people actually buy (seems like a basic concept, but you would be surprised).

Also they're typically right on par with Amazon's pricing and no need to wait for it to ship, just a quick trip there and back (although they usually get me buying something I didn't go there for) >:(

by SunshineTheCat

2/23/2026 at 4:50:33 PM

>> although they usually get me buying something I didn't go there for

Me too but I enjoy browsing through the store so it’s (sometimes not so much) cheap entertainment.

by roamerz

2/23/2026 at 5:47:18 PM

I find it hard to believe this is the real timeline when Best Buy is better than Amazon and New Egg. But I prefer Best Buy to both those now.

by _DeadFred_

2/23/2026 at 6:18:51 PM

What would make me question the timeline more is if we still had a B&M Circuit City in town!

by roamerz

2/23/2026 at 9:13:11 PM

NewEgg is still great if you specific "Fulfilled by newegg" or whatever magic checkbox stands for "No actually this is a product we have bought and have in our warehouse from a real company and you are paying us to sell that physical item to you from our warehouse"

Of course, that eliminates 90% of their "inventory", but I only ever wanted to buy computer products from them anyway.

by mrguyorama

2/23/2026 at 8:31:47 PM

The rural Best Buys kind of are terrible. “Middle America” and “Empty Nester” targeted locations really don’t give you anything other than medicore middle-of-the-line product selections. What I’d kill for one of the “Urban Trendsetter” format locations…

by kotaKat

2/23/2026 at 11:03:47 PM

I've been thinking that having competitive markets may require banning this kind of thing.

It's important that firms are not led in a way that prevents them from competing on price, and that may require limiting how they may take on debt.

by impossiblefork

2/23/2026 at 7:06:42 PM

Here’s the part I don’t understand. If they can’t exit, don’t they lose money in spite of the limited downside risk? For example, the Toys “R” Us example:

"$1.3 billion came from the buyers’ own pockets”

"PE consortium collected $470 million in fees and interest over the course of ownership”

So they lost $830M on the deal?

by jtbayly

2/23/2026 at 9:03:49 PM

Yes, this is exactly the question I always have with the PE narratives - what do the supply-side incentives of PE look like? Is this an overall profitable activity where the vultures and their debt-backers win out? Is it merely profitable for the PE firm but a whole bunch of debt-bagholders lose out? Are those losers corporate junk bond stuffed into retirements funds and whatnot, but the funds' managers are happy with their own fees, and customers don't really notice the slightly lower returns from a few "bad investments" (but are still ultimately being swindled) ?

The article touches on this a little in vague terms, citing some studies, which is more than I can say for most. If this is an economically destructive dynamic, and it most certainly feels like it is, then some type of investor must be losing out, right?? It seems worth it to focus on who those parties are to see if that source of energy can be cut off.

by mindslight

2/23/2026 at 4:00:17 PM

Surely there is more to the story. Why would big banks lend in these situations if they always end in bankruptcy?

by megaman821

2/23/2026 at 4:09:48 PM

As the article says, leveraged buyouts of retail end in bankruptcy only 41% of the time, and most of those bankruptcies are presumably not a total loss for the banks. So it's just a matter of pricing the loans to ensure the successes cover the losses.

(Why do private equity firms want to be in this business? Because the 59% that don't fail often generate very good returns.)

by SpicyLemonZest

2/23/2026 at 4:13:26 PM

> (Why do private equity firms want to be in this business? Because the 59% that don't fail often generate very good returns.)

The way they limit their own exposure to risk seems to increase the odds of the targeted business completely failing, though. I think that's the part people have a problem with.

by bubblewand

2/23/2026 at 4:17:10 PM

Agreed. I'm sure there's edge cases I don't know about, but in general I think it would be better to simply not allow leveraged buyouts and let businesses that would fail without the buyout fail.

by SpicyLemonZest

2/23/2026 at 4:22:18 PM

What kind of rates do you need to charge to cover 41% bankrupcty odds? Home lending would fall at an order of magnitude lower rate.

by megaman821

2/23/2026 at 4:17:45 PM

> The list of PE-owned retail chains that have filed for bankruptcy or liquidated includes Toys “R” Us, Payless ShoeSource, Sports Authority, Gymboree, rue21, The Limited, Barneys New York, and many others.

Once again, you can't lump all PE groups into one all cohorts. All of these companies were bought out by Large-cap PE which is notoriously predatory. They may have an overwhelming amount of the drypowder, but in terms of absolutely number of PE groups, there are far more operating in the middle and lower middle market who don't do this.

by mbesto

2/23/2026 at 4:42:05 PM

> Amazon is very good at bits but has repeatedly failed at atoms.

This idea of bits vs atoms was stolen straight from the CEO of Uber, Travis Kalanick. During the infamous Silicon-Valley-TV-Show-esque Las Vegas company offsite, one of his big talks was about how Uber had to not only deal with bits, ie. the virtual world, but also atoms, ie. the real world. That made it a bigger challenge than all the other companies like Google, Facebook, etc where they could dictate their own rules since they controlled everything, but Uber didn't have that luxury.

by blindriver

2/23/2026 at 3:55:32 PM

TLDR: One chain was gutted by private equity vultures, the other wasn't. Don't need an AI-generated slop article to tell me that.

by rideontime

2/23/2026 at 5:04:36 PM

Yep. Allow and reward piracy and plunder and your society gets plundered by pirates.

by GolfPopper

2/23/2026 at 4:38:11 PM

Counterpoint: I thought it was a useful analysis — I was very disappointed when the local Joann's closed and this added a bunch of context I would not have had otherwise.

by decasia

2/23/2026 at 10:17:01 PM

As was I, but I don't see how the comparison to Best Buy supposedly aping Amazon is useful when step 1 is "don't go billions of dollars into debt for no benefit."

by rideontime

2/23/2026 at 3:59:06 PM

Best Buy isn't long for this world. You can tell from their mobile app, which is extremely slow and has terrible UX. It's a bloated store coasting off of its former success and it's going to slowly suffer the same fate as Fry's if they don't get smart. Best Buy has a few things propping it up right now: PC repair services, home installation, quick availability of replacement items (SSD dies? Get one right now, rather than waiting 3+ days for Amazon), and in-store demos (sound systems and the like). None of these constitute a moat, and these four spaces are already full of competition. Everything else is just warehousing for the eventual liquidation. They should realize that their brand has become a luxury, and they should start acting more like the Apple store, selling fewer items and trying to develop their own brand more.

But really, the app is terrible. And an app is table stakes these days. It's just remarkable how bad it is.

by phendrenad2

2/23/2026 at 4:27:14 PM

Table stakes for which cohort(s) of people? Do you put an app on your personal device for every retailer you do any business with? Guess I'm just old and out of touch, but I would not spend any time considering putting the best buy or mcdonalds app or whatever on my personal device. Why would I?

by pluralmonad

2/23/2026 at 5:03:24 PM

If I'm going to a brick-and-mortar store, if I go online at all, it's only to check stock/availability or look up a product's specs/foibles. No, $STORE, I don't want to create an account. No, I don't want your app. A web browser should be all I need.

by flyinghamster

2/23/2026 at 6:40:46 PM

Once again I'm reminded that the HN crowd operates on a hypersolipsism where reality is continuously constructed from first principles based on one's own ideals.

For anyone who can see past their own mental blocks and reads this far, the Best Buy app has 1.5 MILLION ratings on the App Store and is #18 in worldwide shopping apps. The Walmart app has SEVENTEEN MILLION ratings. But yeah, nobody uses shopping apps. Silly me!

by phendrenad2

2/24/2026 at 12:30:45 AM

I mean, you're up there positing that a company is definitely failing because their app is terrible. Accusing others of constructing a reality based on their own principles is a bit of glass house stone throwing, no? Practically every company with an app that isn't a tech company has a terrible app.

by Dusseldorf

2/23/2026 at 7:01:14 PM

I could never figure out why people would rather install an app than visit a web page. Many apps are just containers for websites that give the app more permissions than it needs.

by postalrat

2/23/2026 at 7:11:36 PM

That's an interesting curiosity. Why not ask them? There's an extremely high probability that someone you talk to on a regular basis has shopping apps installed. Hey! We could do some research, maybe write a paper. But first, you gotta ask them.

by phendrenad2

2/23/2026 at 2:55:26 PM

But Best Buy is a shadow of its former self. I've stopped bothering to go there at all because they never have what I need. Even when I was shopping for a tablet.

by JohnFen

2/23/2026 at 3:57:38 PM

I've noticed that there seems to be big inconsistencies from location to location, at least around me. One Best Buy never has anything on the shelves, doesn't have much of their higher-end stuff at all, and constantly looks like they just got robbed.

But 15 minutes away there's another Best Buy that has a dedicated PC hardware section that almost reminds me of going to Fry's back in the day. I was flabbergasted the first time I walked in there, I almost thought I'd been mistaken and entered a different store.

by MS90

2/23/2026 at 4:27:50 PM

Are you in the bay area, by chance? I suspect the opening of MicroCenter will mean almost no one around here even thinks to try BestBuy for component hardware.

That said, I purchased some peripherals at BB a few months ago because they had what I needed in stock and the price was better than Logitech and the same as Amazon.

by eitally

2/23/2026 at 4:41:00 PM

Probably don't need two Best Buys 15 minutes from one another.

by ModernMech

2/23/2026 at 3:21:17 PM

On the other hand, I can go to my local Best Buy and pick up an nvme drive. Look at the box, make sure it is factory sealed and not counterfeit. Only after I’ve decided it’s legit I can hand over approximately the same amount of money Amazon would have charged me.

by stockresearcher

2/23/2026 at 4:22:49 PM

> make sure it is factory sealed and not counterfeit

Hah. I bought an Apple Pencil from BB. Shrink-wrapped in the box. I get home, the battery won't charge. I figured out from the S/N that someone had bought a new pencil, put their dead one in the box, shrink-wrapped it, returned it, BB put it back into stock, and I ended up with it.

Fortunately, BB replaced it for me, but I've never had this issue with a single Amazon item I've purchased and I've done a lot more shopping from Amazon than BB.

by js2

2/23/2026 at 11:58:18 PM

> Apple Pencil from BB. Shrink-wrapped in the box

Not for nothing, but I can’t remember the last time I purchased anything computer related that was shrink wrapped. It’s all single-use-obvious-if-opened tape

by stockresearcher

2/23/2026 at 5:21:22 PM

Counterpoint: People do this on Amazon all the time. One time I ordered a kick drum stand on Amazon. All I got was the foot of the stand and a brick in the box.

It was supposed to be brand new, not a used item.

by entropicdrifter

2/23/2026 at 9:18:02 PM

I suspect the wildly differing experiences for this depend on the number of bad actors doing this in the pools feeding into whatever warehouses, versus total churn.

For me, living first in Baltimore then NYC, places where there's quite a few people buying quite a few things up and down the cost scale, I never saw a counterfeit anything come up.

That's not to say I think it doesn't happen, just that I think that's why some people have wildly different experiences here.

by rincebrain

2/23/2026 at 3:54:54 PM

If by roughly the same you mean 10% to 100% more (think cables for high markup) and I have to go to the store instead of having it come to me. With much worse selection. Then yes. That's an amazing experience!

by light_hue_1

2/23/2026 at 5:12:03 PM

I mean, yeah, sure if you view having to go to the store as a negative, then you would prefer to order online and have it brought to you.

After years (my whole adolescent and adult life, more or less) of online shopping, I find that it's actually quite refreshing to go to the store, find the product I need, and purchase it. I have it immediately, I got to handle a demo unit and get a feel for it. If I need to return it, I go back to the same store and get my money back the same day.

There are pros and cons to both, for sure, but these days I find I'm valuing the offline experience more and more.

by intrikate

2/23/2026 at 4:28:23 PM

> think cables for high markup

Nearly every time I've bought cheap USB-C cables off Amazon they didn't perform as advertised. The few times I bought name-brand ones they looked different from the ones I've bought at in-person stores and once again failed to perform as advertised (likely counterfeit).

I avoid Amazon as much as possible these days.

by vel0city

2/23/2026 at 4:13:47 PM

Best Buy price matches Amazon...

by seattle_spring

2/23/2026 at 4:10:55 PM

Wait until Sandisk compains you didn't buy through an authorized distributor when you go to register or take advantage of the warranty.

by selimthegrim

2/23/2026 at 9:20:25 PM

At the moment, I think a lot of Best Buy's survival is that Microcenter has very limited store count, and every other store that was primarily electronics has eaten shit and gone by the wayside, meaning it's effectively got a monopoly in certain areas for things like "Dad wants to go buy a new TV and stare at a display of 50 of them to decide between first".

by rincebrain

2/23/2026 at 3:50:47 PM

It seems pretty good to me, or at least my local one is. Best Buy is in a solid niche between, say, Micro Center and Walmart.

by kwertyoowiyop

2/23/2026 at 9:08:40 PM

"IT'S STILL NICE TO GO ANd browse video games in the physical store..... AAAAAAhhhhhhhhhhhhhh......"

by butlike

2/23/2026 at 4:00:03 PM

I kinda feel like Best Buy is the same as it's always been and our baseline expectations of how much a store should have skyrocketed. In 2006 I didn't shop for electronics by doing intensive online research to find the specific brand and model I want; I drove to Best Buy and picked whatever made the most sense out of what they had.

by SpicyLemonZest

2/23/2026 at 4:07:48 PM

At least the ones in my area are substantially worse than they used to be. They don't have a lot of items they used to carry, and the ones they do carry have a much more limited selection than they used to.

But perhaps, as another commenter mentioned, this varies a lot depending on the store you're in?

Regardless, at least for my needs, Best Buy has nearly nothing for me. That didn't used to be true.

by JohnFen

2/23/2026 at 4:14:09 PM

Their stores have much more unused floorspace now. CDs and DVDs are mostly gone. Lots of dead space around the phone displays now.

by kevin_thibedeau

2/23/2026 at 4:16:19 PM

My Best Buy is far more crowded than it used to be. They use the aisles for boxed TV's etc.

by bryanlarsen

2/23/2026 at 4:32:00 PM

The store closest to me repurposed about half of its floor space as pretty much warehouse space for online orders. They even repurposed half the doors for pickup/return lockers.

by vel0city

2/23/2026 at 3:53:10 PM

I've bought a few things from the in the last few years and their prices and service are pretty solid. You can even get some great deals on house brands or open box stuff.

by tootie

2/23/2026 at 4:48:13 PM

Fabrics? I'm old enough to remember my mom making clothes from scratch, because buying fabric by the yard and sewing from patterns was cheaper than buying ready made clothes. That no longer being the case, how many people less than 50 years old do you know that can even operate a sewing machine? Totally different product category than tech gadgets.

by MarkusWandel

2/23/2026 at 5:27:33 PM

Crafters, cosplayers, artists, designers, decorators, parents working on their child's 'school project', etc., all used JoAnns. And the ladies who worked there (it was mostly women) were usually very helpful in helping you figure out how much material you needed for a project. It was as useful as Home Depot is to DIY home improvement projects.

by onlypassingthru

2/23/2026 at 4:56:45 PM

Joann Fabrics had decent foot traffic and the margins were good. My kid and I averaged probably 3 trips a month.

They sold a whole lot more than fabric.

by sitkack

2/23/2026 at 5:26:45 PM

Joanns died b/c of two things - they stocked items no one really wanted, and they doubled down on that by opening way too many stores.

With a focus on fabric and yarn, they would still be here - maybe. Handcock Fabrics went the same way and they died. Hopefully, someone will take a clue and start a new focused venture. Buying fabric over the web is horrendous.

by nonford150

2/23/2026 at 5:49:57 PM

This wasn’t my experience, if anything, they often didn’t have stock in the store and told us to go online to buy the item.

And 800+ stores doesn’t seem like over saturation, it looks like there are more BestBuy and Hobby Lobby stores than that and they both sell stuff that most folks would feel equally comfortable buying online. Where, as you rightly stated, buying fabric online is a non starter for most folks.

My experience was similar to the author, bare shelves and 1 or 2 folks around to help customers…it honestly felt more like purposeful neglect on the part of the owners.

by disposition2