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Joann, the well-known crafts and fabrics retailer, has filed for Chapter 11 bankruptcy for the second time in less than a year, as announced on Wednesday (January 15). The company is now seeking to sell most of its assets, with Gordon Brothers Retail Partners acting as the initial bidder. Despite the bankruptcy filing, Joann's stores and online shopping will remain operational during the process.
The company is struggling with $615 million in funded debt and $133 million in trade debt, according to a report by PYMNTS. Interim CEO Michael Prendergast cited "unanticipated inventory challenges" and a "sluggish retail economy" as key factors leading to the bankruptcy. Joann's previous bankruptcy filing in March 2024 was followed by a restructuring that halved its debt, but ongoing economic challenges have persisted.
The company, which operates around 800 stores and employs 19,000 people, has faced declining sales as inflation and high interest rates continue to affect consumer spending. Many shoppers are prioritizing essential items over non-essential crafts and fabrics, leading to decreased sales for specialty retailers like Joann.
As Joann navigates the sales process, it remains committed to serving its customers and supporting its employees. However, the future of the company depends on finding a suitable buyer during the bankruptcy auction.
Joann is one of many retailers struggling under the current economic climate, joining The Container Store, Big Lots, and Party City.