Joann Inc., the parent company of Joann Fabrics, is moving forward with plans to close hundreds of underperforming stores nationwide as part of its Chapter 11 bankruptcy restructuring. The retailer, which has been a staple in the crafting industry for over 80 years, cited financial difficulties and ongoing sale negotiations as reasons for the widespread closures.
According to court filings, Joann Inc. has identified hundreds of stores across more than 40 states that will shut down, with states like California, Florida, Illinois, and Michigan being hit hardest. These locations, deemed unprofitable and unlikely to attract buyers, will be liquidated as the company seeks to stabilize its operations.
Mass Store Closures and Policy Changes Coming Soon
As part of the restructuring, Joann Inc. has partnered with Gordon Brothers Retail Partners LLC to oversee liquidation sales. If approved by the court, the sales will begin shortly after a scheduled hearing on February 14 and continue in phases.
Additionally, Joann Inc. plans to modify customer policies, including:
- Ending gift card redemptions
- Eliminating refunds within 14 days of court approval
These adjustments are part of cost-cutting measures aimed at maximizing value for creditors and keeping the remaining stores operational.
Joann Fabrics’ Declining Sales and Mounting Debt
The bankruptcy filing follows years of financial struggles for Joann Inc., which had already filed for Chapter 11 in early 2024. The company blamed a steep drop in consumer spending following the pandemic-era retail boom for its nearly 20% revenue decline between 2021 and 2023.
Interim CEO Michael Prendergast pointed to unexpected inventory issues and an overall sluggish retail market as key factors that forced the company back into an unsustainable debt position.
More Closures on the Horizon?
Joann Inc. has requested court approval to close additional stores beyond the current list, depending on how the restructuring and potential sale negotiations unfold. The company, which currently operates over 800 stores across 49 states, may be forced to shrink even further if it cannot secure new investment or buyers.
While Joann Fabrics had initially promised to keep stores open during bankruptcy proceedings, the latest filing signals a more aggressive approach to downsizing.
The Bigger Picture: Another Retail Giant Falls
Joann’s bankruptcy is part of a larger retail collapse, as brick-and-mortar chains struggle to compete with online giants like Amazon. From Bed Bath & Beyond to Rite Aid, legacy retailers are buckling under pressure from shifting consumer habits and rising operational costs.
If Joann Inc. can’t turn things around, America’s most recognizable fabric and craft store may disappear entirely in the coming years.
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