Joann stores, a staple in the fabric and craft retail industry for 82 years, are set to close all 800 locations following two bankruptcies within a span of 10 months. This marks the end of an era for the beloved retailer. A sale approval hearing is scheduled for Wednesday in the U.S. Bankruptcy Court for the District of Delaware.
Neil Saunders, managing director of GlobalData, explained the situation in an email to Retail Dive: “With a mountain of debt and a brand that has become increasingly broken, the pathways for survival have closed for Joann. This is not really the type of environment in which companies, including other retailers, want to take a risk by trying to turnaround the company. As such, it is not surprising that liquidation has become the eventual destination.”
The company first filed for Chapter 11 bankruptcy in March 2024, managing to write off over $500 million of its nearly $1.1 billion debt. Despite this, Joann kept all its stores open and retained about 18,000 employees with the aid of $132 million from its lenders. However, by the start of this year, the company faced unexpected inventory challenges and the prolonged impact of a sluggish retail economy, leading to a second bankruptcy filing in January.
Joann’s new ownership group, GA Group, and the company’s lenders have decided to wind down operations. They plan to initiate going-out-of-business sales at all locations. The retailer reported $615.7 million in debt in January, and the winning bidders will offer an additional $105 million credit bid for most of the company’s assets.
Most of the Joann stores will remain open until the end of May, allowing time for going-out-of-business sales to be conducted. The new ownership group is also planning a multimillion-dollar retention plan for Joann’s approximately 19,000 employees, which includes organizing job fairs and granting workers time off to interview for other jobs.
Sources:
https://www.retaildive.com/news/joann-sold-closing-stores-out-of-business/740740/
https://www.usatoday.com/story/money/2025/02/24/joann-closing-stores-locations/80022854007/