Bankrupt craft chain to shut 500 stores across the US

By DANIEL JONES, US CONSUMER EDITOR

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Craft retailer Joann said on Wednesday it plans to shut 500 stores across the US as part of its ongoing bankruptcy process. In January, the retailer - with a history spanning over 80 years - filed for Chapter 11 protection amid increased competition from online sellers. It was the second time it had filed for bankruptcy in two years. The closures are part of its plan to cut costs and boost profitability to attract a buyer.

Craft retailer Joann said on Wednesday it plans to shut 500 stores across the US as part of its ongoing bankruptcy process. In January, the retailer - with a history spanning over 80 years - filed for Chapter 11 protection amid increased competition from online sellers. It was the second time it had filed for bankruptcy in two years. The closures are part of its plan to cut costs and boost profitability to attract a buyer.

'This was a very difficult decision to make, given the major impact we know it will have on our team members, our customers and all of the communities we serve,' a Joann spokesperson said. The retailer, founded in 1943 and known for selling sewing, arts and crafts, as well as home décor products, currently has 800 stores in 49 states, with 19,000 employees. Joann had kept all its retail stores open during its previous bankruptcy.

'This was a very difficult decision to make, given the major impact we know it will have on our team members, our customers and all of the communities we serve,' a Joann spokesperson said. The retailer, founded in 1943 and known for selling sewing, arts and crafts, as well as home décor products, currently has 800 stores in 49 states, with 19,000 employees. Joann had kept all its retail stores open during its previous bankruptcy.

While the company's statement didn't specify locations, court filings show closures in all 50 states, with California, Florida, Indiana, Michigan, New York, Pennsylvania, and Washington among the hardest hit. 'A careful analysis of store performance and future strategic fit for the company determined which stores should remain operating as usual at this time,' Joann added. Joann is hoping to find a buyer, and the closures are linked to potential suitors wanting loss-making stores closed. When it filed for bankruptcy in January, experts said Joann made a big blunder while it was reorganizing its business after filing for Chapter 11 in March last year.

While the company's statement didn't specify locations, court filings show closures in all 50 states, with California, Florida, Indiana, Michigan, New York, Pennsylvania, and Washington among the hardest hit. 'A careful analysis of store performance and future strategic fit for the company determined which stores should remain operating as usual at this time,' Joann added. Joann is hoping to find a buyer, and the closures are linked to potential suitors wanting loss-making stores closed. When it filed for bankruptcy in January, experts said Joann made a big blunder while it was reorganizing its business after filing for Chapter 11 in March last year.

Joann, which operates in nearly every US state, shut zero stores and tried to soldier on - rather than cutting loss-making shops and ending pricy leases. Experts say that was a mistake as cutting the store count helps cut costs. Inventory issues have created out-of-stock and gaps in assortments – which has weakened its specialist status in the fabric and textiles space and caused customer defections. The experience in many stores is also subpar, which has damaged sales. Ahead of the bankruptcy filing, Joann shuttered six of its 815 stores .

Joann, which operates in nearly every US state, shut zero stores and tried to soldier on - rather than cutting loss-making shops and ending pricy leases. Experts say that was a mistake as cutting the store count helps cut costs. Inventory issues have created out-of-stock and gaps in assortments – which has weakened its specialist status in the fabric and textiles space and caused customer defections. The experience in many stores is also subpar, which has damaged sales. Ahead of the bankruptcy filing, Joann shuttered six of its 815 stores .

Until 2018, it was known as Jo-Ann Stores but rebranded as 'Joann' to move beyond fabrics to embrace a wider range of crafts. The six stores closed in January are in Burlington, Iowa; Owings Mills, Maryland; Holyoke, Massachusetts; Ithaca, New York; Hickory, North Carolina; and Williamsport, Pennsylvania. Shoppers will benefit from steep discounts during liquidation sales, with markdowns ranging from 50 to 90 percent off in affected locations.

Until 2018, it was known as Jo-Ann Stores but rebranded as 'Joann' to move beyond fabrics to embrace a wider range of crafts. The six stores closed in January are in Burlington, Iowa; Owings Mills, Maryland; Holyoke, Massachusetts; Ithaca, New York; Hickory, North Carolina; and Williamsport, Pennsylvania. Shoppers will benefit from steep discounts during liquidation sales, with markdowns ranging from 50 to 90 percent off in affected locations.

Joann first filed for Chapter 11 bankruptcy in March last year after pandemic-era sales growth faded, leaving the retailer with $1.2 billion in debt. It emerged from bankruptcy the next month - with 815 stores across 49 states - after creditors agreed to cancel $505 million in debt in exchange for ownership of the company. Sarah Foss, head of legal at Debwire, said in January: ' Brick-and-mortar retail chains like Joann has been grappling with fierce competition from online retailers like Amazon.

Joann first filed for Chapter 11 bankruptcy in March last year after pandemic-era sales growth faded, leaving the retailer with $1.2 billion in debt. It emerged from bankruptcy the next month - with 815 stores across 49 states - after creditors agreed to cancel $505 million in debt in exchange for ownership of the company. Sarah Foss, head of legal at Debwire, said in January: ' Brick-and-mortar retail chains like Joann has been grappling with fierce competition from online retailers like Amazon.

'Joann joins the likes of Bed Bath & Beyond, Christmas Tree Shops, and Soft Surroundings, which have all commenced Chapter 11 cases in the past year. 'Retailers often seek out Chapter 11 bankruptcy protection to restructure their operations - it provides them with some bargaining power with landlords as they reduce their retail footprint and right-size their balance sheet.' Joann is the latest retailer to face challenges after experiencing a pandemic-era sales boom. With Americans now returning to work, the surge in home crafting has significantly declined.

'Joann joins the likes of Bed Bath & Beyond, Christmas Tree Shops, and Soft Surroundings, which have all commenced Chapter 11 cases in the past year. 'Retailers often seek out Chapter 11 bankruptcy protection to restructure their operations - it provides them with some bargaining power with landlords as they reduce their retail footprint and right-size their balance sheet.' Joann is the latest retailer to face challenges after experiencing a pandemic-era sales boom. With Americans now returning to work, the surge in home crafting has significantly declined.

Home organization specialist The Container Store suffered the same fate, and filed for bankruptcy last month . Joann's closures come after a widespread 'retail apocalypse' last year saw major companies file for bankruptcy and brick-and-mortar stores close in their droves . Up until mid-December, US retailers shut 7,300 stores - up nearly 60 percent from 2023. The most recent big retail bankruptcy was Container Store , which filed for Chapter 11 protection on December 22. There has been no news yet on the fate of its brick-and-mortar locations.

Home organization specialist The Container Store suffered the same fate, and filed for bankruptcy last month . Joann's closures come after a widespread 'retail apocalypse' last year saw major companies file for bankruptcy and brick-and-mortar stores close in their droves . Up until mid-December, US retailers shut 7,300 stores - up nearly 60 percent from 2023. The most recent big retail bankruptcy was Container Store , which filed for Chapter 11 protection on December 22. There has been no news yet on the fate of its brick-and-mortar locations.

Despite receiving a boost from Marie Kondo's hit Netflix show 'Tidying Up' during the Covid-19 pandemic, the chain has been weighed down by mounting losses in recent years. Big Lots also said last year it was beginning 'going out of business' sales at all its stores across the US, after filing for bankruptcy in September. The company initially said it was closing all its 963 remaining locations, after a sale to a private equity firm fell through - but has since found an investor that should keep between 200 and 400 open. Meanwhile, after nearly four decades as a US retail institution, Party City announced late last year it would close all of its 850 stores in the coming weeks.

Despite receiving a boost from Marie Kondo's hit Netflix show 'Tidying Up' during the Covid-19 pandemic, the chain has been weighed down by mounting losses in recent years. Big Lots also said last year it was beginning 'going out of business' sales at all its stores across the US, after filing for bankruptcy in September. The company initially said it was closing all its 963 remaining locations, after a sale to a private equity firm fell through - but has since found an investor that should keep between 200 and 400 open. Meanwhile, after nearly four decades as a US retail institution, Party City announced late last year it would close all of its 850 stores in the coming weeks.

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