Joann, the fabric and crafts retailer, has announced plans to close approximately 500 stores across the United States, which constitutes more than half of its current storefronts. This drastic decision comes as the company faces significant challenges after filing for Chapter 11 bankruptcy protection for the second time within a year.
The announcement was made on Wednesday, and it follows a series of operational struggles that include slow consumer demand and issues with inventory management. Joann, headquartered in Hudson, Ohio, filed its initial Chapter 11 application in March 2024, subsequently emerging as a private entity. However, continuing challenges led to the recent filing in January, prompting the company to seek a buyer for the business.
In a statement, Joann emphasized the tough nature of this decision and its expected impact on employees, customers, and local communities. The company reiterated that streamlining its store locations is essential for finding a viable path forward in these turbulent times.
Currently, Joann operates about 800 stores across 49 states, with the planned closures affecting locations in several states, including Arizona, California, Florida, and Texas. Specific details regarding the timeline for these store closures and how many employees will be impacted remain unclear, but Joann has sought court approval to initiate this process.
Joann’s challenges are largely attributed to shifting consumer behavior post-COVID-19, where interest in home crafts has diminished compared to the early pandemic surge. The retailer has also faced increasing competition from other craft supply stores like Hobby Lobby, as well as large retailers such as Target that have expanded their arts and crafts offerings.
Interim CEO Michael Prendergast acknowledged in a court filing that unexpected inventory shortages and a weak retail economy contributed to Joann’s financial difficulties, which ultimately led to the latest bankruptcy proceedings. He noted that these challenges resulted in a significant decline in product availability, again setting the company back into a difficult financial position.
In light of the proposed sale of the business, Joann’s focus remains on navigating through this turbulent period while seeking stability. There is a proposed “stalking horse” bid agreement in place with Gordon Brothers Retail Partners, which may provide a potential pathway for the company’s future.
This moment in Joann’s history serves as a reminder of the unpredictable nature of retail, especially within the crafts sector. While the closures signal a significant reduction in their physical presence, there remains hope for the company to restructure and adapt to current market trends. The community will be watching closely as Joann attempts to turn around its fortunes in the coming months.