NEW YORK — Joann, a fabric and crafts retailer facing significant challenges, has announced plans to shut down around 500 of its stores across the United States, which equates to more than half of its existing locations. This decision, revealed on Wednesday, comes during a period of uncertainty for the company, which filed for Chapter 11 bankruptcy protection once again last month. The Hudson, Ohio-based company has cited sluggish consumer demand and supply chain troubles as key factors contributing to its ongoing struggles.
Joann’s first Chapter 11 filing occurred in March 2024, and the retailer had emerged as a private entity afterward. However, the operational difficulties persisted, leading to a second bankruptcy filing in January. The company is currently in discussions to sell its business and indicated in its latest court filing that closing “underperforming” stores is essential to finalize that sale.
The retailer expressed its regrets about the implications of this closure on employees, customers, and the communities it serves. In a statement, the company acknowledged the tough nature of this decision but emphasized that resizing its store network is vital for navigating forward effectively.
Joann operates approximately 800 stores across 49 states at present. The initial list of the nearly 500 locations slated for closure includes stores in various states, notably Arizona, California, Florida, Illinois, and New York, among others. The timeline for these closures and the total number of employees affected remain unclear, as the company seeks court approval to initiate the process.
Founded in 1943 with a single shop in Cleveland, Ohio, Joann evolved into a national chain known as Jo-Ann Fabric and Craft Stores, before rebranding to the simpler “Joann” for its 75th anniversary. The past year has seen the retailer facing headwinds, including a reduction in discretionary spending as customers have shifted away from at-home crafting activities, a trend that had surged during the COVID-19 pandemic. Additionally, Joann has encountered heightened competition from rivals, including Hobby Lobby and large retailers like Target, which now offer extensive art supplies.
Despite adopting a new business strategy after exiting bankruptcy last spring, Joann has struggled with unforeseen inventory challenges. In a declaration filed with the court during its latest bankruptcy proceedings, interim CEO Michael Prendergast noted that inventory levels had significantly declined, causing operational difficulties.
Amidst these economic pressures in the retail environment, Joann has stated that selling the business is the most prudent route forward. The company is reportedly engaged in a “stalking horse” bid agreement with Gordon Brothers Retail Partners, underlining its efforts to find a sustainable way to navigate these turbulent times.
