Fabrics and crafts chain Joann seeks buyer, files for bankruptcy again
It is the second time it has sought Chapter 11 protection within a year. The company did not comment if it expects store closures.
Crafts and fabric chain Joann has filed for bankruptcy again, and now it’s looking for a buyer.
It is the second time the retailer has sought Chapter 11 protection within a year. The company said in court filings Wednesday that it has "faced significant strategic and operational challenges" since April, when it emerged from its previous bankruptcy, six weeks after the initial filing.
Despite efforts to improve its inventory and profitability, the company on Wednesday cited “increasingly tight liquidity levels” — which means Joann is having a hard time finding enough cash to maintain operations. Those obstacles, coupled with “significant and lasting challenges in the retail environment,” have given the company no choice but to seek bankruptcy protection again, interim chief executive Michael Prendergast said in a news release.
According to court filings, Joann has $615.7 million in total funded debt obligations. Gordon Bros. Retail Partners, a lender that has been involved with a number of troubled retailers — most recently Big Lots — put forth an initial bid for Joann, though the retail chain is hoping for additional offers.
The Hudson, Ohio-based chain, which has been operating for more than 80 years, has four distribution centers and about 800 stores in 49 states, according to court filings. The company did not comment if it expects store closures. Over the past few months, however, it shuttered eight locations in six states, Retail Dive reported.
Joann is the latest in a slew of specialty retailers to file for bankruptcy or announce store closures. Coresight Research in December projected that more than 7,300 stores locations would shutter by the end of 2024, compared with about 5,500 in 2023. Bankruptcies in the sector last year about doubled.
Party City, once the destination for celebration essentials and holiday decor, announced in December that it was going out of business and closing all of its stores. That same week, Big Lots said it was liquidating all 900 stores. Eight days later, the discount retailer said it found a buyer who would keep at least 200 stores open, possibly preserving thousands of jobs. Two days before Christmas, the Container Store also announced a bankruptcy filing, though no layoffs or store closures were imminent.