Joann Bankruptcy: Stores Remain Open Amid Financial Troubles
Joann, the well-known craft store chain previously called Jo-Ann Fabrics, has recently filed for bankruptcy due to ongoing financial challenges. Despite this news, customers can rest assured that Joann’s more than 800 stores nationwide will continue operations, and its website will remain active. The Hudson, Ohio-based company is currently in the process of restructuring its finances to ensure business continuity.
In a statement, Joann’s chief financial officer, Scott Sekella, emphasized the company’s commitment to its suppliers, partners, team members, and other stakeholders. The company aims to maintain normal operations to provide the best service to its millions of customers across the country. Joann and certain affiliates have initiated Chapter 11 bankruptcy proceedings in the U.S. Bankruptcy Court for the District of Delaware.
As part of the court-supervised bankruptcy process, Joann anticipates securing $132 million in new financing. Additionally, it plans to reduce its funded debt by approximately $505 million. Despite these financial adjustments, Joann reassures that its customers, vendors, landlords, and other trade creditors will not experience any service disruptions.
Furthermore, Joann is set to transition back into a private company and will be delisted from the Nasdaq stock exchange, marking a shift from its public status just two years after going public in March 2021. The company noted in an SEC filing that the surge in the sewing and crafting industry during the COVID-19 pandemic, as individuals crafted masks and engaged in DIY projects at home, had positively impacted its business.
However, amidst a sales decline in September 2023, Joann announced operational restructuring and staff layoffs to address the challenges. In a December earnings report, the company revealed a 4.1% decrease in third-quarter net sales compared to the previous year, with long-term debt reaching approximately $1.2 billion.
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