Feb. 12 (UPI) — Sewing and crafts retailer Joann will close 500 of its 800 stores in the United States while undergoing bankruptcy restructuring.
The popular retailer isn’t going out of business, but it is downsizing its remaining stores and its retail footprint while undergoing a Chapter 11 bankruptcy, which is the company’s second such filing during the past 11 months.
“Right-sizing our store footprint is a critical part of our efforts to ensure the best path forward,” Joann officials said in a statement to CNN.
Hudson, Ohio-based Joann will close stores in all 50 states, but consumers in California, Florida, Indiana, Michigan, New York, Pennsylvania and Washington will be affected the most.
Joann was a publicly traded company when its leadership filed for Chapter 11 restructuring in March 2024 while facing a $1 billion debt.
The company emerged from that bankruptcy filing as a privately owned entity and kept all of its stores open, but continued business challenges and debt forced the fabrics firm to file for Chapter 11 bankruptcy in Delaware in January.
This time, the retailer is closing most of its stores and will undergo a court-supervised sale to a successor company with Gordon Brothers Retail Partners LLC acting as its stalking horse buyer.
“Since becoming a private company in April, the board and management team have continued to execute on top-and bottom-line initiatives to manage costs and drive value,” Interim Chief Executive Officer Michael Prendergast said Jan. 15 in a news release.
“The last several years have presented significant and lasting challenges in the retail environment, which, coupled with our current financial position and constrained inventory levels, forced us to take this step,” Prendergast said.
Gordon Brothers Retail Partners is serving as the stalking horse bidder by submitting a minimum bid amount while Joann officials continue seeking bids for its proposed sale that will be supervised by the bankruptcy court in Delaware.
“We have determined that initiating a court-supervised sale process is the best course of action to maximize the value of the business,” Prendergast said.
If Joann does not receive any higher bids, Gordon Brothers Retail Partners will become its new owner.
Joann secured $134 million in financing toward its $1 billion debt after last year’s bankruptcy filing, but recent store closures forced the company to file for Chapter 11 bankruptcy again.