Joann Inc., a long-established supplier of art supplies and fabrics in the United States, has recently disclosed its intention to shutter all its U.S. outlets following a Chapter 11 bankruptcy filing last month. According to a statement acquired by Reuters, the 82-year-old company plans to liquidate its assets to a purchasing group. Initially, Joann’s executives anticipated a buyer would sustain its operations; however, the highest bidder intends to initiate going-out-of-business sales at all locations.
In January, Joann had over 800 retail locations within the U.S., although several hundred of these were closed in the previous month. As of the same month, the company possessed $538.3 million in inventory and employed approximately 19,000 individuals across every U.S. state except Hawaii.
Joann also reported liabilities of $615.7 million during its Chapter 11 filing, including more than $133 million owed to suppliers. Maintaining its numerous locations incurred monthly rental costs of $26 million alone.
Court documents reveal that Joann had encountered challenges with suppliers who had removed certain essential products, with yarn and sewing supplies deliveries becoming erratic. This situation posed a risk to Joann’s reputation as a comprehensive resource for crafting enthusiasts.
The company began closing around 500 of its stores in January, a move described by a company spokesperson to FOX Business as part of a strategy to enhance the value and longevity of its operations. “A thorough analysis of store performance and strategic fit for the Company determined which stores should remain operational,” the representative explained, emphasizing the importance of right-sizing its store footprint as part of its future strategy.
This announcement follows a challenging period for Joann, which filed for Chapter 11 in March 2024 for the first time in its history but did not close any of its approximately 800 locations initially. Customers can use Joann gift cards until February 28, and the closure of remaining stores will be gradually phased out in the coming weeks to minimize disruptions to vendors, customers, and employees.
This report included contributions from Reuters and FOX Business’ Danielle Genoverse.