<PAGE> 1
As filed with the Securities and Exchange Commission on June 29, 1999
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------------------------------
FORM 11-K
/X/ ANNUAL REPORT PURSUANT TO SECTION 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1998
Commission File No: 1-6695
JO-ANN STORES, INC.
EMPLOYEES' SAVINGS AND PROFIT SHARING PLAN
(Full title of the plan and the address of the plan, if different from that of
the issuer named below)
Jo-Ann Stores, Inc.
5555 Darrow Road
Hudson, OH 44236
(Name of issuer of the securities held pursuant to the plan and the address of
its principal
executive office)
Page 1 of 3
<PAGE> 2
REQUIRED INFORMATION
Jo-Ann Stores, Inc. Employees' Savings and Profit Sharing Plan (the "Plan") is
subject to the Employee Retirement Income Security Act of 1974 ("ERISA").
Therefore, in lieu of the requirements of Items 1-3 of Form 11-K, the financial
statements and schedules of the Plan for the two fiscal years ended
December 31, 1998 and 1997, which have been prepared in accordance with the
financial reporting requirements of ERISA, are attached hereto as Exhibit 99 and
incorporated herein by this reference.
SIGNATURES
The Plan. Pursuant to the requirements of the Securities Exchange Act of 1934,
the Committee (or other persons who administer the employee benefit plan) have
duly caused this annual report to be signed on its behalf by the undersigned
hereunto duly authorized.
JO-ANN STORES, INC.
EMPLOYEES' SAVINGS AND PROFIT SHARING PLAN
By: Jo-Ann Stores, Inc. Employees' Savings and Profit Sharing
Plan Committee
/s/ Rosalind Thompson
Rosalind Thompson June 29, 1999
Committee Chairperson
Page 2 of 3
<PAGE> 3
JO-ANN STORES, INC. EMPLOYEES' SAVINGS AND
PROFIT SHARING PLAN
EXHIBIT INDEX
<TABLE>
<CAPTION>
Official
--------
Exhibit No. Description
----------- -----------
<S> <C>
23 Consent of Independent Public Accountants
99 Jo-Ann Stores, Inc.
Employees' Savings and Profit-Sharing Plan
Financial Statements
As of December 31, 1998 and 1997
Together With Report of
Independent Public Accountants
</TABLE>
Page 3 of 3
<PAGE> 1
Exhibit 23
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation of our
report on the financial statements of the Jo-Ann Stores, Inc. Employees' Savings
and Profit-Sharing Plan dated May 7, 1999, included in this Form 11-K into the
Company's previously filed Registration Statement (Form S-8) pertaining to the
Jo-Ann Stores, Inc. Employees' Savings and Profit-Sharing Plan (#33-32809).
Arthur Andersen LLP
Cleveland, Ohio
June 29, 1999.
<PAGE> 1
Exhibit 99
JO-ANN STORES, INC.
EMPLOYEES' SAVINGS AND PROFIT-SHARING PLAN
FINANCIAL STATEMENTS
AS OF DECEMBER 31, 1998 AND 1997
TOGETHER WITH REPORT OF
INDEPENDENT PUBLIC ACCOUNTANTS
<PAGE> 2
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Advisory Committee of
Jo-Ann Stores, Inc. Employees'
Savings and Profit-Sharing Plan:
We have audited the accompanying statements of net assets of Jo-Ann Stores, Inc.
Employees' Savings and Profit-Sharing Plan (the Plan) as of December 31, 1998
and 1997, and the related statement of changes in net assets for the year ended
December 31, 1998, as listed in the accompanying index. These financial
statements and the schedules referred to below are the responsibility of the
Plan's management. Our responsibility is to express an opinion on these
financial statements and schedules based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets of the Plan as of December 31, 1998 and
1997, and the changes in its net assets for the year ended December 31, 1998, in
conformity with generally accepted accounting principles.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of assets held
for investment purposes (Schedule I) and reportable transactions (Schedule II),
as listed in the accompanying index, are presented for purposes of additional
analysis and are not a required part of the basic financial statements but are
supplementary information required by the Department of Labor's Rules and
Regulations for Reporting and Disclosure under the Employee Retirement Income
Security Act of 1974. The supplemental schedules have been subjected to the
auditing procedures applied in the audits of the basic financial statements and,
in our opinion, are fairly stated in all material respects in relation to the
basic financial statements taken as a whole.
Arthur Andersen LLP
Cleveland, Ohio,
May 7, 1999.
<PAGE> 3
JO-ANN STORES, INC.
-------------------
EMPLOYEES' SAVINGS AND PROFIT-SHARING PLAN
------------------------------------------
INDEX TO FINANCIAL STATEMENTS
-----------------------------
DECEMBER 31, 1998
-----------------
Statement of Net Assets as of December 31, 1998
Statement of Net Assets as of December 31, 1997
Statement of Changes in Net Assets for the Year Ended
December 31, 1998
Notes to Financial Statements
Schedule I--Item 27a--Schedule of Assets Held for
Investment Purposes as of December 31, 1998
Schedule II--Item 27d--Schedule of Reportable Transactions
for the Year Ended December 31, 1998
<PAGE> 4
JO-ANN STORES, INC.
-------------------
EMPLOYEES' SAVINGS AND PROFIT-SHARING PLAN
------------------------------------------
STATEMENT OF NET ASSETS
-----------------------
AS OF DECEMBER 31, 1998
-----------------------
<TABLE>
<CAPTION>
Participant Directed
-----------------------------------------------------------------------------------------
Fidelity Intermediate Company Company
Stock Magellan EB Magic Income Stock Stock
Index Fund Fund Fund Fund Fund A Fund B
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
ASSETS:
Cash and cash equivalents $ -- $ -- $ -- $ -- $ 31,629 $ 42,197
Receivables -- -- -- -- 57,369 195
Investments, at market-
Corporate stocks -- -- -- -- 3,761,408 1,341,976
Key Bank-
Victory Stock Index Fund 9,008,764 -- -- -- -- --
Prism Fidelity Magellan Fund -- 6,506,573 -- -- -- --
Prism Magic Fund -- -- 4,562,256 -- -- --
Prism Money Market Fund -- -- 600,442 -- -- --
Victory Intermediate Income Fund -- -- -- 2,091,176 -- --
Loan Fund -- -- -- -- -- --
----------- ----------- ----------- ----------- ----------- -----------
Total investments, at market . 9,008,764 6,506,573 5,162,698 2,091,176 3,761,408 1,341,976
Employer contributions receivable .. -- -- -- -- -- --
Participant contributions receivable 34,867 29,331 17,185 12,827 29,339 8,791
----------- ----------- ----------- ----------- ----------- -----------
Total assets 9,043,631 6,535,904 5,179,883 2,104,003 3,879,745 1,393,159
----------- ----------- ----------- ----------- ----------- -----------
LIABILITIES:
Accrued expenses and other 7,468 6,380 4,214 2,826 7,085 2,664
----------- ----------- ----------- ----------- ----------- -----------
NET ASSETS $ 9,036,163 $ 6,529,524 $ 5,175,669 $ 2,101,177 $ 3,872,660 $ 1,390,495
=========== =========== =========== =========== =========== ===========
<CAPTION>
Nonparticipant Directed
------------------------------------------------------
Stock Stock Company Company
Ownership Ownership Stock Stock Participant
Fund A Fund B Fund A Fund B Loans Total
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
ASSETS:
Cash and cash equivalents $ 2,941 $ 2,705 $ 23,860 $ 75,018 $ -- $ 178,350
Receivables -- 1,634 43,278 344 -- 102,820
Investments, at market-
Corporate stocks 195,467 168,776 2,837,554 2,385,736 -- 10,690,917
Key Bank-
Victory Stock Index Fund -- -- -- -- -- 9,008,764
Prism Fidelity Magellan Fund -- -- -- -- -- 6,506,573
Prism Magic Fund -- -- -- -- -- 4,562,256
Prism Money Market Fund -- -- -- -- -- 600,442
Victory Intermediate Income Fund -- -- -- -- -- 2,091,176
Loan Fund -- -- -- -- 498,680 498,680
----------- ----------- ----------- ----------- ----------- -----------
Total investments, at market . 195,467 168,776 2,837,554 2,385,736 498,680 33,958,808
Employer contributions receivable .. -- -- 20,444 22,341 -- 42,785
Participant contributions receivable -- -- -- -- -- 132,340
----------- ----------- ----------- ----------- ----------- -----------
Total assets 198,408 173,115 2,925,136 2,483,439 498,680 34,415,103
----------- ----------- ----------- ----------- ----------- -----------
LIABILITIES:
Accrued expenses and other -- -- 5,344 17,753 -- 53,734
----------- ----------- ----------- ----------- ----------- -----------
NET ASSETS $ 198,408 $ 173,115 $ 2,919,792 $ 2,465,686 $ 498,680 $34,361,369
=========== =========== =========== =========== =========== ===========
</TABLE>
The accompanying notes to financial statements are an integral part of this
statement.
<PAGE> 5
JO-ANN STORES, INC.
-------------------
EMPLOYEES' SAVINGS AND PROFIT-SHARING PLAN
------------------------------------------
STATEMENT OF NET ASSETS
-----------------------
AS OF DECEMBER 31, 1997
-----------------------
<TABLE>
<CAPTION>
Participant Directed
-------------------------------------------------------------------------------------
Fidelity Intermediate Company Company
Stock Index Magellan EB Magic Income Stock Stock
Fund Fund Fund Fund Fund A Fund B
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
ASSETS:
Cash and cash equivalents $ -- $ -- $ -- $ -- $ 125,088 $ 41,801
Investments, at market-
Corporate stocks -- -- -- -- 5,054,181 1,992,482
Key Bank-
Victory Stock Index Fund 6,478,627 -- -- -- -- --
Prism Fidelity Magellan Fund -- 4,045,076 -- -- -- --
Prism Magic Fund -- -- 4,225,657 -- -- --
Prism Money Market Fund -- -- 641,657 -- -- --
Victory Intermediate Income Fund -- -- -- 1,840,669 -- --
Loan Fund -- -- -- -- -- --
----------- ----------- ----------- ----------- ----------- -----------
Total investments, at market 6,478,627 4,045,076 4,867,314 1,840,669 5,054,181 1,992,482
Employer contributions receivable -- -- -- -- -- --
Participant contributions receivable 26,486 19,581 15,284 9,691 25,585 5,973
----------- ----------- ----------- ----------- ----------- -----------
Total assets 6,505,113 4,064,657 4,882,598 1,850,360 5,204,854 2,040,256
----------- ----------- ----------- ----------- ----------- -----------
LIABILITIES:
Accrued expenses and other 3,595 2,471 2,151 1,308 4,465 1,874
----------- ----------- ----------- ----------- ----------- -----------
NET ASSETS $ 6,501,518 $ 4,062,186 $ 4,880,447 $ 1,849,052 $ 5,200,389 $ 2,038,382
=========== =========== =========== =========== =========== ===========
<CAPTION>
Nonparticipant Directed
--------------------------------------------------------
Stock Stock Company Company
Ownership Ownership Stock Stock Participant
Fund A Fund B Fund A Fund B Loans Total
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
ASSETS:
Cash and cash equivalents $ 3,188 $ 3,099 $ 94,364 $ 68,201 $ 4,975 $ 340,716
Investments, at market-
Corporate stocks 293,818 272,668 3,812,804 3,250,892 $ -- 14,676,845
Key Bank-
Victory Stock Index Fund -- -- -- -- -- 6,478,627
Prism Fidelity Magellan Fund -- -- -- -- -- 4,045,076
Prism Magic Fund -- -- -- -- -- 4,225,657
Prism Money Market Fund -- -- -- -- -- 641,657
Victory Intermediate Income Fund -- -- -- -- -- 1,840,669
Loan Fund -- -- -- -- 402,844 402,844
----------- ----------- ----------- ----------- ----------- -----------
Total investments, at market 293,818 272,668 3,812,804 3,250,892 402,844 32,311,375
Employer contributions receivable -- -- 16,690 16,587 -- 33,277
Participant contributions receivable -- -- -- -- -- 102,600
----------- ----------- ----------- ----------- ----------- -----------
Total assets 297,006 275,767 3,923,858 3,335,680 407,819 32,787,968
----------- ----------- ----------- ----------- ----------- -----------
LIABILITIES:
Accrued expenses and other -- -- 3,480 3,057 -- 22,401
----------- ----------- ----------- ----------- ----------- -----------
NET ASSETS $ 297,006 $ 275,767 $ 3,920,378 $ 3,332,623 $ 407,819 $32,765,567
=========== =========== =========== =========== =========== ===========
</TABLE>
The accompanying notes to financial statements are an integral part of this
statement.
<PAGE> 6
JO-ANN STORES, INC.
-------------------
EMPLOYEES' SAVINGS AND PROFIT-SHARING PLAN
------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
----------------------------------
FOR THE YEAR ENDED DECEMBER 31, 1998
------------------------------------
<TABLE>
<CAPTION>
Participant Directed
-------------------------------------------------------------------------------------
Stock Fidelity Intermediate Company Company
Index Magellan EB Magic Income Stock Stock
Fund Fund Fund Fund Fund A Fund B
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
INCREASES:
Interest and dividend income $ 919,985 $ (181) $ 6,357 $ 107,431 $ 7,865 $ 3,445
Employer contributions -- -- -- -- -- --
Participant contributions 1,019,729 869,109 484,057 323,208 797,359 234,019
Realized gains on sale of investments 196,587 115,477 75,117 6,309 286,055 67,431
Unrealized gains on investments 776,090 1,412,339 212,666 26,331 -- --
----------- ----------- ----------- ----------- ----------- -----------
2,912,391 2,396,744 778,197 463,279 1,091,279 304,895
----------- ----------- ----------- ----------- ----------- -----------
DECREASES:
Distributions to former participants 580,570 325,026 408,350 264,852 386,230 134,007
Administrative expenses 18,367 14,788 10,570 6,869 29,287 11,152
Unrealized losses on investments -- -- -- -- 1,614,920 699,336
Other -- -- -- -- -- --
----------- ----------- ----------- ----------- ----------- -----------
598,937 339,814 418,920 271,721 2,030,437 844,495
----------- ----------- ----------- ----------- ----------- -----------
NET INCREASE (DECREASE) FOR THE YEAR 2,313,454 2,056,930 359,277 191,558 (939,158) (539,600)
BALANCE, BEGINNING OF YEAR 6,501,518 4,062,186 4,880,447 1,849,052 5,200,389 2,038,382
NET INTERFUND TRANSFERS 221,191 410,408 (64,055) 60,567 (388,571) (108,287)
----------- ----------- ----------- ----------- ----------- -----------
BALANCE, END OF YEAR $ 9,036,163 $ 6,529,524 $ 5,175,669 $ 2,101,177 $ 3,872,660 $ 1,390,495
=========== =========== =========== =========== =========== ===========
<CAPTION>
Nonparticipant Directed
-------------------------------------------------------------------------------
Stock Stock Company Company
Ownership Ownership Stock Stock Participant
Fund A Fund B Fund A Fund B Loans Total
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
INCREASES:
Interest and dividend income $ 143 $ 162 $ 5,934 $ 6,124 $ 37,405 $ 1,094,670
Employer contributions -- -- 513,898 518,375 -- 1,032,273
Participant contributions 66,805 67,282 -- -- -- 3,861,568
Realized gains on sale of investments 14,638 13,731 215,796 119,877 -- 1,111,018
Unrealized gains on investments -- -- -- -- -- 2,427,426
----------- ----------- ----------- ----------- ----------- -----------
81,586 81,175 735,628 644,376 37,405 9,526,955
----------- ----------- ----------- ----------- ----------- -----------
DECREASES:
Distributions to former participants 87,407 87,227 291,367 238,234 29,760 2,833,030
Administrative expenses -- -- 22,094 19,825 -- 132,952
Unrealized losses on investments 90,868 96,600 1,218,273 1,243,265 -- 4,963,262
Other 1,909 -- -- -- -- 1,909
----------- ----------- ----------- ----------- ----------- -----------
180,184 183,827 1,531,734 1,501,324 29,760 7,931,153
----------- ----------- ----------- ----------- ----------- -----------
NET INCREASE (DECREASE) FOR THE YEAR (98,598) (102,652) (796,106) (856,948) 7,645 1,595,802
BALANCE, BEGINNING OF YEAR 297,006 275,767 3,920,378 3,332,623 407,819 32,765,567
NET INTERFUND TRANSFERS -- -- (204,480) (9,989) 83,216 --
----------- ----------- ----------- ----------- ----------- -----------
BALANCE, END OF YEAR $ 198,408 $ 173,115 $ 2,919,792 $ 2,465,686 $ 498,680 $34,361,369
=========== =========== =========== =========== =========== ===========
</TABLE>
The accompanying notes to financial statements are an integral part of this
statement.
<PAGE> 7
JO-ANN STORES, INC.
-------------------
EMPLOYEES' SAVINGS AND PROFIT-SHARING PLAN
------------------------------------------
NOTES TO FINANCIAL STATEMENTS
-----------------------------
DECEMBER 31, 1998 AND 1997
--------------------------
1. SUMMARY OF PLAN:
The original Jo-Ann Stores, Inc. Employees' Savings and Profit-Sharing Plan was
adopted as of September 1, 1974, and has been amended on occasion in order to,
among other things, maintain compliance with the requirements of the Employee
Retirement Income Security Act of 1974 (ERISA). Effective July 1, 1998,
employees of the former House of Fabrics, Inc., which was acquired by Jo-Ann
Stores, Inc., (the Company) during 1998, are able to participate in the Plan.
The principal provisions of the Plan are as follows:
ELIGIBILITY
All active employees of the Company and its wholly owned subsidiaries that have
adopted the Plan, who have been continuously employed by the Company for a
period of one year, have attained the age of 21, have completed at least 1,000
hours of service and are not members of a recognized collective bargaining
organization, are eligible to participate in the Plan.
DEFERRED INCOME CONTRIBUTIONS
Pursuant to a Salary Reduction Agreement permitted under Section 401(k) of the
Internal Revenue Code (IRC), plan participants may elect to defer from 1% to 10%
of their compensation, subject to an annual limitation under the IRC, and such
amounts will be contributed to the Plan by the Company as deferred income
contributions.
EMPLOYER MATCHING CONTRIBUTIONS
The Company will contribute to the Plan, subject to the forfeiture provision
outlined below, an adjustable percentage of the deferred income contributions
made by participants, (up to a 4% employee deferred compensation contribution),
as well as such additional amounts as the Board of Directors may determine.
These contributions are allocated among participants in proportion to the
deferred income contributions made on their behalf for such period and credited
to their separate accounts.
The Company's matching contribution can range from 0% to 100% and can be
modified prior to the beginning of a month by the Company. For the 1998 and 1997
plan years, the Company's matching contribution was 50% of the first 4%
contributed by participants. All Company matching contributions are in the form
of common stock of the Company and are invested in the Company Stock Fund A and
Company Stock Fund B.
Company contributions are funded only to the extent that they exceed cumulative
forfeitures of participants terminated from the Plan. Such forfeitures amounted
to $24,342 in 1998.
<PAGE> 8
-2-
INVESTMENT OF EMPLOYEE CONTRIBUTIONS
Under the Plan, each participant selects the manner in which deferred income
contributions to their account are to be invested. Contributions are invested in
5% increments, up to 100%, in any one of the following investment options:
a. Victory Stock Index Fund -- Investments are made in a portfolio of
stocks attempting to match the Standard & Poor's 500 index with a rate
of return that may fluctuate substantially and providing for no
guarantee against loss.
b. Prism Fidelity Magellan Fund -- Investments are made in common stocks
of domestic, foreign and multi-national companies believed to have
growth potential and providing for no guarantee against loss.
c. Prism EB Magic Fund -- Investments are made in investment contracts
issued by insurance companies and banks providing for stability of
principal and attractive rates of interest.
d. Victory Intermediate Income Fund -- Investments are made in
investment-grade debt securities issued by corporations and
obligations of the U.S. Government and its agencies or
instrumentalities dependent upon the prevailing interest rates and
providing for a lower risk of loss.
e. Company Stock Fund A -- Investments are made in Jo-Ann Stores, Inc.
Class A common stock and providing for no guarantee against loss.
f. Company Stock Fund B -- Investments are made in Jo-Ann Stores, Inc.
Class B common stock and providing for no guarantee against loss.
A participant may change his investment election with respect to future
contributions and, separately, past contributions on a monthly basis.
PAYSOP CONTRIBUTIONS
Prior to February 1, 1987, the Company made PAYSOP contributions to the Stock
Ownership Fund for each year in an amount equal to the tax credit available
under Section 44G of the IRC. This tax credit was eliminated by the Tax Reform
Act of 1986 and, therefore, the Company no longer makes PAYSOP contributions.
Distributions of the PAYSOP account balances to terminated participants are made
in shares of Company common stock unless otherwise specified by the participant.
VESTING REQUIREMENTS
Participants' deferred income contributions, together with earnings thereon,
vest immediately. All other Company contributions, plus earnings thereon, vest
over a four-year period based on years of service, as defined by the Plan
agreement. A participant's entire interest in the Plan becomes fully vested
upon his death while employed, attainment of age 65 or permanent and total
disability.
<PAGE> 9
-3-
TRUSTEE'S FEES AND OTHER EXPENSES
Generally, costs incident to the purchase and sale of securities, such as
brokerage commissions and stock transfer taxes, are paid by the respective
funds. Other costs and expenses incurred in administering the Plan, including
fees of the trustee, are generally paid by the Plan.
TERMINATION
Although it has not expressed any intent to do so, the Board of Directors,
without further approval of shareholders, has the right to discontinue its
contributions at any time and to terminate the Plan, subject to the provisions
of ERISA. In the event of Plan termination, participants will become 100% vested
in their accounts.
2. SIGNIFICANT ACCOUNTING POLICIES:
BASIS OF ACCOUNTING
The accompanying financial statements are prepared on the accrual basis of
accounting.
VALUATION OF INVESTMENTS
The assets included in the Statements of Net Assets are stated at their market
values as of December 31, 1998 and 1997. Schedule I summarizes the Plan's
investments held at December 31, 1998.
ESTIMATES
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
3. TAX STATUS:
The Internal Revenue Service has determined and informed the Company, by letter
dated February 20, 1997, that the Plan complies with applicable sections of the
IRC.
4. INFORMATION CERTIFIED BY TRUSTEE:
The trustee, Key Trust Company of Ohio, N.A., maintains records of investment
transactions and participant accounts and determines the valuation of the
investment portfolio of each fund. Information with respect to (1) investments
included in the Statements of Net Assets and the Schedule of Assets Held for
Investment Purposes (Schedule I), (2) all items included in the Statement of
Changes in Net Assets, and (3) the Schedule of Reportable Transactions (Schedule
II) has been certified by the trustee as being complete and accurate.
5. PARTY-IN-INTEREST TRANSACTIONS:
During the years ended December 31, 1998 and 1997, there were no prohibited
transactions with a party-in-interest, as defined by ERISA.
<PAGE> 10
-4-
6. REPORTABLE TRANSACTIONS:
Schedule II summarizes the Plan's reportable transactions for the year ended
December 31, 1998. As defined by ERISA, a reportable transaction is a
transaction or series of transactions in one security involving amounts in
excess of 5% of the market value of the Plan's net assets as of the beginning of
the Plan year.
7. SUBSEQUENT EVENT:
On March 1, 1999, the Company switched from Key Trust Company of Ohio, N.A., as
trustee of the Plan to Institutional Trust Company, a subsidiary of Invesco
Retirement Plan Services. The Plan participants may now elect to defer from 1%
to 15 % of their compensation. The fair market value of the total investments
was transferred to Institutional Trust Company on the effective date as follows:
Key Trust Company Fund Institutional Trust Company Fund
Transferred From: Transferred To:
----------------------------- -------------------------------
Prism EB Magic Fund IRT Stable Value Fund
Victory Intermediate Income Pegasus Bond Fund
Fund
Victory Stock Index Fund IRT 500 Index Fund
Prism Fidelity Magellan Fund AIM Blue Chip Fund
Company Stock Fund A Company Stock Fund A
Company Stock Fund B Company Stock Fund B
<PAGE> 11
SCHEDULE I
JO-ANN STORES, INC.
-------------------
EMPLOYEES' SAVINGS AND PROFIT-SHARING PLAN
------------------------------------------
ITEM 27A--SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
---------------------------------------------------------
AS OF DECEMBER 31, 1998
-----------------------
EMPLOYER IDENTIFICATION NUMBER: 34-0720629
------------------------------------------
PLAN NUMBER: 001
----------------
<TABLE>
<CAPTION>
Market
Description Cost Value
- -------------------------------------------- ---------- ------------
<S> <C> <C>
Victory Stock Index Fund $6,391,327 $9,008,764
Prism Fidelity Magellan Fund 4,175,089 6,506,573
EB Magic Fund 4,024,361 4,562,256
Prism Money Market Fund 555,382 600,442
Victory Intermediate Income Fund 2,040,224 2,091,176
JoAnn Stores, Inc. Class A common stock 5,306,108 6,794,429
JoAnn Stores, Inc. Class B common stock 3,002,548 3,896,488
Prism Money Market Fund 178,350 178,350
*Loan Fund, interest rates varying from 8.75% to 9.5% 498,680 498,680
</TABLE>
*Represents a party-in-interest
The accompanying notes to financial statements are an
integral part of this schedule.
<PAGE> 12
SCHEDULE II
JO-ANN STORES, INC.
-------------------
EMPLOYEES' SAVINGS AND PROFIT-SHARING PLAN
------------------------------------------
ITEM 27D--SCHEDULE OF REPORTABLE TRANSACTIONS
---------------------------------------------
FOR THE YEAR ENDED DECEMBER 31, 1998
------------------------------------
EMPLOYER IDENTIFICATION NUMBER: 34-0720629
------------------------------------------
PLAN NUMBER: 001
----------------
<TABLE>
<CAPTION>
Purchase/Sale Cost of Net
Description Price Asset Gain
- ------------------------------------------------ -------------- ---------- ----------
<S> <C> <C> <C>
SALES:
EB Magic Fund $2,660,433 $2,660,433 $ --
Prism Fidelity Magellan Fund 407,988 307,841 100,147
Victory Stock Index Fund 655,772 463,021 192,751
PURCHASES:
EB Magic Fund 2,503,042 2,503,402 --
Prism Fidelity Magellan Fund 1,331,668 1,331,668 --
Victory Stock Index Fund 2,213,233 2,213,233 --
</TABLE>
The accompanying notes to financial statements are an
integral part of this schedule.
