Joann Announces Nationwide Closure Following Bankruptcy Filing
Joann, the well-known crafts and fabric retailer, has announced that it will be shutting down all its U.S. stores, just one month after filing for Chapter 11 bankruptcy protection. The 82-year-old company revealed in a statement obtained by Reuters that it plans to sell all its assets to a buyer group. Initially, executives had hoped that a potential buyer would continue operations, but the highest bidder intends to initiate going-out-of-business sales across all remaining locations.
As of January, Joann operated more than 800 retail stores across the United States, excluding Hawaii. However, hundreds of these locations have already closed in recent weeks. At the time of its bankruptcy filing, the company had an inventory valued at approximately $538.3 million and employed 19,000 workers. Despite these assets, Joann faced significant financial struggles, reporting a total debt of $615.7 million, including over $133 million owed to suppliers. The company also struggled with the high costs of maintaining its physical stores, spending approximately $26 million in rent every month.
Financial Challenges and Supply Chain Issues
Joann’s financial difficulties were compounded by supply chain disruptions. Court documents revealed that some suppliers had stopped providing key products that the retailer depended on, affecting its ability to maintain a comprehensive selection of crafting essentials. Delays in the delivery of yarn and sewing items further impacted the company’s reputation as a one-stop destination for hobbyists and artisans. These challenges, combined with the burden of mounting debt and operational expenses, ultimately forced the company to make drastic decisions.
To stabilize its financial position, Joann had already begun the process of shutting down approximately 500 of its stores earlier this year. A company spokesperson stated that these closures were a strategic move to optimize store performance and ensure long-term sustainability. The spokesperson emphasized that “right-sizing” the company’s store footprint was a critical step in determining the best path forward. Despite these measures, Joann was unable to secure a viable turnaround, leading to the complete closure of all remaining locations.
Impact on Customers and Future Plans
The decision to shut down operations follows a tumultuous year for Joann. In March 2024, the company filed for Chapter 11 bankruptcy for the first time in its history but managed to keep all of its stores open at the time. However, as financial pressures mounted, store closures became inevitable.
Customers who hold Joann gift cards will be able to use them until February 28, after which they will no longer be redeemable. The shutdown process will be phased out over the coming weeks to minimize disruptions for employees, vendors, and loyal shoppers. While crafting enthusiasts may soon have to look elsewhere for supplies, Joann’s legacy as a beloved retailer in the creative community will undoubtedly leave a lasting impact.
