Joann files for bankruptcy, again: How did the retailer get to this point?

USA Today

14-02-2025

Joann files for bankruptcy, again: How did the retailer get to this point?
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Joann plans to close 500 locations, stop accepting gift cards and returns
Crafts store Joann has asked a judge to allow it to begin liquidation sales and give customers a short window to use gift cards and return items. (Scripps News)
Scripps News
Joann, the retailer known for selling fabrics and crafts for the last 82 years, has filed for bankruptcy and says it is preparing to close more than half of its U.S. locations.
The retailer told USA TODAY in a statement Wednesday that it would be closing "approximately 500" of its roughly 850 locations across the U.S. The news comes after the company filed for bankruptcy for the second time in less than a year, after initially filing and then going private in March 2024.
The Ohio-based retailer filed for a second bankruptcy in January and said it did so to "facilitate a sale process to maximize the value of its business."
"Since becoming a private company in April, the Board and management team have continued to execute on top-and bottom-line initiatives to manage costs and drive value,' Michael Prendergast, interim CEO of Joann, said.
Here's a timeline of the Joann bankruptcy.
Who owns Joann?
Joann was founded in 1943 and sells a variety of crafting supplies including fabric by the yard, sewing machines, Cricut machines, yarn, home decor and more.
The company went private in 2011 when it was acquired by the equity firm Leonard Green & Partners for about $1.6 billion. In 2021, Joann, still majority-owned by Leonard Green & Partners, went public at an initial $12 a share.
Joann became a private company again in April following its initial bankruptcy filing, so its shares were no longer listed by the Nasdaq or any other national stock exchange.
2024: Joann files for bankruptcy
The first time Joann filed for Chapter 11 bankruptcy protection was in March 2024.
In a statement, the Ohio-based retailer said it had secured approximately $132 million in new financing and "related financial accommodations." At the time, it expected to reduce its funded debt by about $500 million, or half of its $1 billion total debt.
At the time of the filing, the company said no disruptions would be seen to its customers, vendors, landlords and other trade creditors.
Scott Sekella, Joann's chief financial officer and co-lead of the interim office of the CEO said at the time that 95% of Joann's stores were cash flow positive.
Sekella has since resigned from the company before being announced as the new CFO of Victoria's Secret.
Joann store closures earlier this year
In early 2025, rumblings of ever-increasing trouble began appearing at Joann as store closures were slated to begin, according to industry and local reports.
In a statement to Retail Dive in January, Joann's director of corporate communications Amanda Hayes said the locations were being closed "as part of routine store location evaluation and optimization" and were not a major shuttering event. "We also opened new and remodeled locations in recent months, including new stores in Great Falls, MT and Maplewood, MN," she said.
Local news outlets in Pennsylvania, Iowa, Massachusetts and Delaware reported dates for local store closures ranging from Jan. 12-19. A worker at a Owings Mills, Maryland location said it would close on Jan. 19.
Then, bankruptcy again for Joann
Weeks after the trickle of store closures, Joann announced it would be filing again for bankruptcy.
'The last several years have presented significant and lasting challenges in the retail environment, which, coupled with our current financial position and constrained inventory levels, forced us to take this step,' Prendergast said in a statement on Wednesday.
However, despite the gloomy news for customers and workers, Joann said its stores and website are "open in the ordinary course and continue to serve customers."
Joann closing 500 stores
On Wednesday, Joann said it would be closing "approximately 500" of its about 850 locations in the U.S. In a statement to USA TODAY, the company said it is looking to "right-size its store footprint."
"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," Joann's statement said. "A careful analysis of store performance and future strategic fit for the Company determined which stores should remain operating as usual at this time."
Contributing: Mary Walrath-Holdridge, Emily DeLetter, Jonathan Limehouse
Fernando Cervantes Jr. is a trending news reporter for USA TODAY. Reach him at [e-mail] and follow him on X @fern_cerv_.