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Why Does Private Equity Keep Buying Yarn Companies?

Deborah Knits

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Private equity is buying yarn companies. But what does that actually mean—and should knitters be worried?

Following the sale of Knitting for Olive to Hawk Infinity, I've seen a lot of discussion about private equity, holding companies, acquisitions, and what this could mean for a beloved yarn brand. But "private equity" can describe very different kinds of investors with very different incentives.

So instead of stopping at the label, we're following the money.

In this video, we're looking at how investors make money buying companies, why debt matters, what happened to Joann, how Blue Point Capital built Local Crafts Group around brands including Knit Picks, Berroco and Jimmy Beans Wool, and how Hawk Infinity's model compares. Then we'll dig into Knitting for Olive itself: its growth, what Hawk appears to value about the company, where Hawk's money comes from, and what we should actually be watching now that the acquisition is complete.

*CHAPTERS*
00:00 Private equity is buying yarn
02:09 What does "private equity" actually mean?
4:24 Holding company? PE? What's the difference?
05:36 How investors make money buying companies
8:43 Why Yarn?
11:29 Investment models and their outcomes
12:03 What happened to Joann
15:45 Knit Picks, Berroco & Jimmy Beans Wool
19:00 Quince
20:13 Knitting For Olive (a snapshot)
20:48 Who is Hawk Infinity?
21:18 A different model: permanent ownership
22:46 How does Hawk make money?
27:21 What makes KFO valuable?
30:43 Why buy Knitting for Olive?
32:02 European vs American
34:19 Dissecting the KFO announcement
38:44 What happens next?
40:40 How to handle the inevitable 'next time'
41:15 Should we panic?

*SOURCES & FURTHER READING*

Hawk Infinity — company and ownership model:
https://www.hawkinfinity.com/

Hawk Infinity — what it looks for in companies:
https://www.hawkinfinity.com/what-we-...

Hawk Infinity — portfolio, including Knitting for Olive:
https://www.hawkinfinity.com/portfolio

Knitting for Olive financial statements (2018–2025):
https://www.proff.dk/regnskab/knittin...

Blue Point Capital — Local Crafts portfolio and acquisition strategy:
https://www.bluepointcapital.com/port...

Blue Point Capital — Local Crafts acquisition of Jimmy Beans Wool:
https://www.bluepointcapital.com/news...

Hawk Infinity Software / Snowball Software Group — acquisitions and planned deleveraging:
https://live.euronext.com/en/products...

Snowball Software Group — bond prospectus / debt financing:
https://live.euronext.com/en/products...

Sweaters Featured In Video Intro
Treelight by Jennifer Steingass
Wetherell by Kiyomi Burgin (worn in this video)
Ninilchik Swoncho by Caitlin Hunter
Badger and Bloom by Anne Ventzel
Altheda by Jennifer Steingass
Sonrae by Jennifer Steingass
Goldwing by Jennifer Steingass
Sundby Sweater by We Are Knitters
Wild Grass by Asja Janeczek
Norwood by Jennifer Steingass
Nurtured by Andrea Mowry
Seamless Raglan Sweater by Elizabeth Zimmermann
Felix Cardigan by Amy Christoffers
Winston Pullover by Jane Richmond
The Weekender by Andrea Mowry
So Faded by Andrea Mowry
The Storyteller by Jennifer Steingass

Stuff I Love:
https://shopmy.us/shop/knitwithdeborah

Let's Keep In Touch:
Instagram: Instagram: knitwithdeborah
Tiktok: TikTok: knit_talk
Patreon: Patreon: KnitWithDeborah

#knitting #yarn #privateequity

20 Comments

@CanadaSkies 2 days ago

Before this video: Private equity?! grabs pitchfork

After this video: Private equity? keeps pitchfork within reach

@SuzecrochetStitchInTime 2 days ago

Private Equity is doing something far more dangerous. They are buying hospitals and Dr.'s offices that used to be private. Also old age homes and rehab centers. All for money, not for health.

@onibaka14 2 days ago

I feel like it needs to be acknowledged that even though it may be “less distribution needs, less logistics and faster delivery” that is due to people losing jobs. Reducing 6 different companies warehouses into 1 means 5 warehouses are no longer employing people. It may not be so dramatic but this is where those cost decreases are actually coming from and even though it might not seem overtly sinister that is still affecting people’s livelihoods even if quality isn’t necessarily reduced.

@MoWhitenower 2 days ago

You’re the first fiber content creator who’s actually explained PE accurately. Everybody else is just emoting without explaining valid reasons for why PE can be problematic. Bravo!

@storageheater 2 days ago

Well, I still just feel despair over yet another monopoly acquisition, but at least I'm much much better informed. Thanks!

@nadiknit5806 1 day ago

They are buying up Vet Clinics, Dentist Offices, Medical Clinics, rental properties, and now Daycares… it’s quite concerning.

@megaslush9629 2 days ago

Hair? Majestic.
Points? Expertly made.
Engaging? Very, I don't do any fiberart but was hooked immediately.
Pun? Intended.
Excellent video, barely noticed the time and it flew by! Great algo pull, instant sub

@carlavanholsteijn7508 2 days ago

Thank you, Deborah, for once again making such interesting and valuable content. I can tell you're not only a teacher at heart, but also a life-long learner! I appreciate the time and effort it takes to research and produce these videos.

@FeralPossumVibes 2 days ago

Honestly, the whole system of Private Equity needs to be reformed to be heavily regulated along with strict consumer protection standards.

In the end, all Private Equity Companies really only serve the wealthy elite who are gambling on their investment, but with none of the loss. They pay no financial consequences if the acquisition goes under. As we all very well know by now, the wealthy elite do not care about the general public; so a lost gamble is just a page in their book of aquiring more money, while the rest of us are left to pick up the pieces of their indifference.

@alphabo1 2 days ago

As usual, you're very accurate and careful with your homwework. We now have all the elements to decide whether we'll keep buying yarn from Knitting for Olive. Thank you very very much. Watching your video and listening to you describing events is also very very pleasant.

@mywovenodyssey 1 day ago

I think my issue with this is that preserving local businesses and creating thriving local communities is becoming almost impossible. Especially in the US and other countries do take that and try to utilize it in their own countries (look at the history of countries who adopted American fast food restaurants after the war) The government says it cares about small businesses, but it often feels like the system favors large corporations, including private equity firms, over the small businesses that make our communities unique.

I think we are all seeing it happen in our own towns. Small businesses are shutting down because they simply cannot compete with corporate businesses. Large companies can buy in bulk, source products overseas, and keep prices low because they have the resources and purchasing power to do so. Small business owners often don’t have that luxury. They cannot always afford to lower their prices and still cover their expenses, pay their employees fairly, or offer benefits like health insurance and 401(k) plans.

There is so much more to this than simply telling people to quit their jobs, open a small business, and follow their dreams. We need to talk about the economic conditions that make it increasingly difficult for independent businesses to survive in the first place.

What frustrates me is seeing people encourage others to open their own businesses while participating in an economic system that can exploit workers, favor corporate interests, and contribute to the very decline of local businesses they claim to care about.

Everyone wants a Gilmore Girls kind of town, where you know the people who own the local shops, businesses support one another, and the community comes together. We want places with character, connection, and a sense of belonging rather than another row of corporate chains.

But that kind of community cannot survive on nostalgia alone. It requires an economic environment where small businesses have a realistic chance of succeeding, where people can afford to support their local shops, and where independent business owners aren’t expected to compete with corporations that have vastly more resources.

Everyone wants the charm of a small town, but are we willing to support the people and businesses that make those towns worth living in? Or are we just romanticizing a community that our current economic system is making harder and harder to sustain?

@coquigirl0789 2 days ago

Thank you for this. I was one of the people that was frustrated at the comments because everyone’s knee jerk reaction was borderline unhinged. Nothing wrong with being concerned, but automatically assuming KFO is going out of business is just not it.

@wolfwise1135 2 days ago

I think one thing to consider is sometimes these small family owned businesses need an out, it could a death of an owner, family sickness or even they just don’t have it in them to run the business, and I don’t think they owe us an explanation for why they need out. It can be hard to find someone to take the over a family business and so selling it is the easiest option and probably the most profitable for them. At the end of the day they’ve got to do what best for them and it’s kind of a luxury to be able to find someone else to take on the business as it was.

@fionamann1553 1 day ago

Hobbii was bought by some private equity corporation. Then they stopped delivering to my country, Australia, and others. Something along the lines of 'not being able to provide the high level of service we deserve'. Their shipping costs had been relatively reasonable. We just weren't financially lucrative I guess.

@rosettajohnson2826 2 days ago

Leveraged buyouts should be illegal. What do you mean one company is responsible for paying the debts of the other company that temporarily bought it, even after the deal ends? If someone takes on debt to buy the exclusive rights to an artist's work and a say in what they make for the next 10 years, that artist should not be the one paying off that debt for the rest of their life. What stops that buyer from taking on excessive debt? The artist? If given the choice between a massive once-in-a-lifetime payout and a gamble that they can pay most of it back, or no deal at all and never being able to get anywhere close to that figure, what would most people choose? Be honest.

@jennaheiser625 2 days ago

The company I work for was bought by an American PE firm. My specific company has been mostly unchanged. We actually got some minor upgrades initially. Then…they bought more companies. And some of those were dissolved in order to pass their production off to other companies in the group (mostly us). Completely different outcomes, even within the same acquisition grouping.

Our CEO was very blunt in sharing that the goal was to have us get bought in a few years (it was actually kind of gross how blunt he was in the context he said it), and another purchase would basically just be rolling the dice again.

Our company does things that few others do within the industry, and I think it’s the main driver in why we were mostly left alone. Knitting by Olive seems like they’re in the same boat (ethical sourcing, cruelty protections, etc.), so there’s a good chance they’ll mostly be kept intact as is.

@knitgirl.7676 2 days ago (edited)

As a retired CPA and Finance “bro” (some of us are female) and also knitter of 45 years and lover of KFO….this is a very well-informed video on this topic. Before we all go screaming into the night about KFO, we need to take a breath and give it a minute. It may be the end of KFO and it may not be. Also, PE firms can’t buy what isn’t for sale. KFO decided to sell for whatever reason as was well within their rights. Time will tell what happens to KFO- if Hawk runs it into the ground..there are many other yarn companies to choose from.

@FindYourSovereignty-Kristine 1 day ago

Regardless of whether the product stays the same, it is about where I am giving my money. I don’t want to participate in supporting a multi-million dollar company so they can buy another small business for their coiffures. I want to support the small business trying to make a nice life for themselves.

@simones.5386 2 days ago

Thank you so much for this nuanced, well-researched breakdown of the KFO news! It’s refreshing to hear it discussed in a non-clickbait, less pessimistic way

@nikkibishop8025 1 day ago

I worry about enshittification. The quality of clothes, for example, seems to be going down even whilst the prices are the same or worse. I hope these companies can avoid this route with their yarn.

Thank you for giving a thorough, thoughtful, balanced account of what this does, doesn’t and might mean for our beloved yarn brands.