Major Sewing Pattern Brands Affected as Joann Stores Liquidate
- Joann supplier Design Group Americas facing financial challenges
- Sold off for $1 in May
- Major customer bankruptcy impacted sales performance
- Trade tariffs increased operational costs and reduced customer orders
- Portfolio includes sewing pattern brands like McCalls, Simplicity, Butterick, and Vogue
- Revenue of $500.3 million for FY 2024
- Operating profit before tax: $4.9 million in FY 2024
- Un-audited net assets of $245.4 million as of Sept. 30, 2024
- Cash-on-hand not enough for sale and wind-down
- Portfolio includes over 50 product categories and brands
Design Group Americas (DGA), the company behind popular sewing pattern brands like McCalls, Simplicity, and Butterick, was sold for just $1 in May. The company cites macroeconomic challenges, including Jo-Ann Stores’ bankruptcy and trade tariffs, as factors affecting its sales performance and revenue. With a financial year 2024 revenue of $500.3 million and an operating profit before tax of $4.9 million, DGA had un-audited net assets of $245.4 million as of Sept. 30, 2024. Despite efforts to rebuild the business, external factors like shrinking demand and tariffs led to its sale. The company’s portfolio includes over 50 product categories and brands.
Factuality Level: 8
Factuality Justification: The article provides accurate information about Joann’s bankruptcy, the impact on DGA, and the reasons behind the sale of Joann’s intellectual property to Michaels. It also includes financial details such as revenue and operating profit before tax for DGA. The information is relevant and not sensationalized or opinionated.
Noise Level: 3
Noise Justification: The article provides relevant information about Joann’s bankruptcy and its impact on DGA, but it could have included more analysis of the broader implications for the crafting industry or insights into how other companies are adapting to similar challenges.
Financial Relevance: Yes
Financial Markets Impacted: No
Financial Rating Justification: The article discusses Joann’s bankruptcy and its impact on DGA, as well as the effects of trade tariffs on pricing strategies and customer orders. It also mentions the sale of Joann’s intellectual property to Michaels. These topics are related to financial matters and companies, but there is no direct mention of specific financial markets being impacted.
Presence Of Extreme Event: Yes
Nature Of Extreme Event: Financial Crash or Crisis
Impact Rating Of The Extreme Event: Moderate
Extreme Rating Justification: The extreme event in this article is the bankruptcy of Jo-Ann Stores, which severely impacted DGA’s sales performance and revenue. The combination of macroeconomic challenges, increasing operational costs due to trade tariffs, and shrinking demand for the category led to the decision to sell off the U.S. business to protect the overall company.
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