Retailers are seeking approval to close hundreds of bad stores in more than 40 states as part of a bankruptcy restructuring.
The retailer has been a staple food in the sewing and craft industry for over 80 years, citing financial difficulties and the ongoing strategic sales process as the main reason for the closure.
According to court filings, Joann Inc. is implementing the restructuring process while continuing to search for potential buyers for the assets.
As part of this effort, the company has identified hundreds of stores in more than 40 states that have been hit hardest in California, Florida, Illinois and Michigan.
The document shows that these locations are considered poorly performed and are unlikely to be included in a potential acquisition transaction.
The bankruptcy filing outlines the company’s plans to liquidate assets at the closing store through a partnership with Gordon Brothers Retail Partners LLC, designated as a “stalkering horse bidder” for liquidation sales. These sales are pending court approval, but will progress in stages immediately following the scheduled hearing on February 14th.
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In addition to the closure, the court filing reveals that Joann Inc. will change its customer policy, including ceases redemption and refunds for gift cards within 14 days of court approval.
According to court documents, the adjustment is in line with the company’s broader cost-cutting efforts to stabilize its financial position and maximize the value of its stakeholders.
Joan’s bankruptcy filing is part of a major trend in the retail struggle, especially for brick and mortar chains facing competition from online retailers.
Joanne’s legal team called for the ability to implement additional closures beyond the initial list as financial restructuring and potential sales negotiations progress.
Founded in Cleveland, Ohio, Joanne Fabric is a go-to destination for sewing enthusiasts, quilters and crafters across the country. The company currently operates more than 800 stores in 49 states.
Between 2021 and 2023, Jo-Ann Stores’ annual revenue fell from $2.76 billion to $2.22 billion, down nearly 20% according to its initial bankruptcy filing. The 2024 bankruptcy was filed to restructure the company.
However, the company continued to face headwinds.
“The unexpected inventory challenge, coupled with the long-term impact of an overly slowing retail economy, has brought Jo-Ann Store back to an unacceptable debt position,” reads the 2024 filing.
The company ultimately decided to resubmit Chapter 11. Jo-Ann Stores initially said its store was open and would continue to serve its customers during the bankruptcy proceedings before the latest store closure filing took place.
A company spokesman did not respond to requests for comment at the time of publication.
Naveen Athrapplely contributed to this report.
