The retailer seeks approval to shutter hundreds of underperforming stores across more than 40 states as part of bankruptcy restructuring.
Joann Inc., the parent company of Joann Fabrics, which filed for Chapter 11 bankruptcy in the U.S. Bankruptcy Court for the District of Delaware last month, is seeking approval to close hundreds of underperforming stores nationwide.
The retailer, a staple in the sewing and crafting industry for more than 80 years, cited financial difficulties and an ongoing strategic sale process as key reasons for the closures.
According to the court filings, Joann Inc. is undertaking a restructuring process while continuing to seek potential buyers for its assets.
As part of this effort, the company has identified hundreds of stores across more than 40 states that will close—with California, Florida, Illinois, and Michigan being hit the hardest.
The documents indicate that these locations have been deemed underperforming and unlikely to be included in any potential acquisition deals.
The bankruptcy filing outlines the company’s plan to liquidate assets at the closing stores through a partnership with Gordon Brothers Retail Partners LLC, which has been designated as the “stalking horse bidder” for the liquidation sales. These sales, pending court approval, will proceed in phases, beginning shortly after a scheduled hearing on Feb. 14.
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In addition to store closures, the court filings reveal that Joann Inc. intends to modify its customer policies, including discontinuing gift card redemptions and refunds within 14 days after the court’s approval.
This adjustment aligns with the company’s broader cost-cutting efforts to stabilize its financial position and maximize value for stakeholders, according to the court documents.
Joann’s bankruptcy filing is part of a larger trend of retail struggles, particularly for brick-and-mortar chains facing mounting competition from online retailers.
Joann’s legal team has requested the ability to conduct additional closures beyond the initial list, depending on the progression of its financial restructuring and potential sale negotiations.
Founded in Cleveland, Ohio, Joann Fabrics has been a go-to destination for sewing enthusiasts, quilters, and crafters across the country. The company currently operates more than 800 stores across 49 states.
Jo-Ann Stores LLC, publicly known as Joann, had originally filed for Chapter 11 bankruptcy in early 2024, after the company had seen “a general withdrawal from the consumer spending highs experienced during COVID,” Michael Prendergast, the interim chief executive officer at the company, said in a court filing.
Between 2021 and 2023, Jo-Ann Stores’ annual revenues dipped from $2.76 billion to $2.22 billion, a decline of almost 20 percent, according to the initial bankruptcy filing. The 2024 bankruptcy was filed to reorganize the company.
However, the company continued to face headwinds.
“Unanticipated inventory challenges post-emergence, coupled with the prolonged impact of an excessively sluggish retail economy, put Jo-Ann Stores back into an untenable debt position,” the 2024 filing reads.
The company eventually decided to file Chapter 11 again. Jo-Ann Stores had initially said its stores would remain open and would continue serving customers during the course of the bankruptcy proceedings before the latest store closure filing was made.
A spokesperson for the company did not respond to a request for comment before publication time.
Naveen Athrappully contributed to this report.
