Crafts retailer JOANN filed for Chapter 11 bankruptcy early Monday morning. The company, with over 800 stores nationwide, is best known for selling craft supplies, home decor and sewing supplies.
The filing allows JOANN to continue to operate while it repays its debts, meaning no stores or online shopping is expected to be affected by the filing, according to a press release. Additionally, any obligations to employees, vendors, landlords and other trade creditors will be paid or otherwise satisfied in full.
According to court documents, JOANN cited increasing interest rates and decreasing sales after a spike in sales during the COVID-19 lockdown in 2021 and 2022. Despite attempts in June 2023 to reduce costs, the company held over $1.06 billion in funded debt at the time of filing.
The company is expected to receive around $132 million in new capital and reduce its debt by over $500 million.
JOANN expects to complete the Chapter 11 process as early as late April 2024, citing strong support from its financial stakeholders. Following this process, the company will likely become a private company, and shares will no longer be listed on Nasdaq or other national stock exchanges, according to the press release.
“Over the past several months, JOANN has made meaningful business improvements through the execution of our Focus, Simplify and Grow cost reduction initiative. We are excited by our progress on both top and bottom-line initiatives in the past year and are confident the steps we are taking will allow JOANN to drive long-term growth. We appreciate the support from our financial and industry stakeholders in this agreement, and their confidence in our ability to continue driving positive business change.”
Chris DiTullio, Chief Customer Officer and co-lead of the Interim Office of the CEO
For more information on how the company will be moving forward, you can visit https://www.joannforward.com/