Wyatte Grantham-Philips, Associated Press
NEW YORK (AP) – A struggling fabric and craft seller Joanne plans to close around 500 stores across the United States.
The move, announced Wednesday, arrives amid Joan’s intense period. Last month, the Hudson, Ohio-based retailer filed for a second Chapter 11 bankruptcy protection within a year, pointing to issues such as consumer demand and shortages of stock.
Joan previously looked for Chapter 11 in March 2024, but later appeared as a private company. However, after operational challenges continued to build up, Joanne filed for bankruptcy again in January. You are currently about to sell your business. On Wednesday, it remains that “low-performance” locations will need to be closed to complete the process.
“This was a very difficult decision given the huge impact it has on team members, our customers, and all the communities we serve,” the company said in a statement sent to the Associated Press. “(But) the footprint of our store is an important part of our efforts to ensure the best possible path.”
Joann currently operates around 800 stores in 49 states. The first list of about 500 locations that are about to close can be found on the company’s restructuring website, including Arizona, California, Colorado, Florida, Georgia, Illinois, Michigan, New York, Pennsylvania, Texas, and more.
It is yet to be seen exactly how many employees will be affected by these closures. Joanne’s Wednesday claims court permission to begin the process.
Joanne’s roots date back to 1943 and has a storefront in Cleveland, Ohio. And the retailer later grew into a national chain. Formerly known as Jo-Ann Fabric and Craft Stores, the company has rebranded under the abbreviated “Joann” name to celebrate its 75th anniversary.
Joan’s bankruptcy filing, seen last year, arrived amid slowdowns in discretionary spending. In particular, consumers have stepped back from home crafts, at least compared to the early Covid-19 pandemic boom. Joan also faces competition in craft space from rivals such as Hobby Lobby and large retailers like Target, who currently offer ample art supplies and kits.
And after coming out of bankruptcy last spring, Joann turned to implementing a new business plan. Interim CEO Michael Prendagast pointed out in the Soldier Court Declaration filed when Joanne began his latest Chapter 11 proceedings on January 15th.
Prendergast explained that the lack of stock had a major ripple effect on Joanne’s core business. This is especially true when “in-stock levels have finally dropped by more than 10%” and “new stages of operational distress.”
Citing these and other macroeconomic challenges seen in the retail space over the past few years, Joan has argued that selling your business is the best way to go. The company says it is proposing a “stalking horse” bidding agreement with Gordon Brothers Retail Partners.
Original issue: February 12, 2025, 5:04pm EST
