Fabrics and crafts retailer Joann filed for Chapter 11 bankruptcy on Monday, a process that will end with the company being owned by some of its creditors.
Joann had been in financial troubles for several months, and reports about a potential bankruptcy filing were first published in early March.
All 830 Joann stores will continue operating as the process begins, the company said in a press release.
“All obligations to employees, vendors, landlords and other trade creditors will be paid or otherwise satisfied in full and honored in the ordinary course of business,” the release continued.
Joann, which is based in the Cleveland suburb of Hudson, had more than $1 billion in debt according to its latest financial statements. The bankruptcy filing includes a $132 million cash infusion and an agreement to reduce the debt by $505 million, the company said.
The company is “confident the steps we are taking will allow Joann to drive long-term growth,” Chief Customer Officer Chris DiTullio said in the release. “We appreciate the support from our financial and industry stakeholders in this agreement.”
Joann went public in 2021 on the back of a pandemic boom that saw people turn to arts and crafts to fill time at home. However, the company’s revenues and stock price have declined since the world reopened.
Though Joann’s stock once traded as high as $17 per share, it was down below $0.25 on Monday morning. In September 2023, Joann laid off numerous employees and cut staffing at its Ohio headquarters.
As part of the bankruptcy filing, Joann will be delisted from the NASDAQ and restructured as a private company, to be owned by “certain of its lenders and industry parties,” according to Monday’s release.
