Dive Brief:
- Craft retailer Joann on Wednesday announced changes to its corporate structure that resulted in the elimination of some positions "from various departments." In a statement to Retail Dive, the company said that over the “past few months” it has restructured both its field and corporate operations “to more closely align our expense and corporate structure to the needs of the business."
- The company declined to say how many people were let go or to provide information on any severance payment arrangements. The retailer did not specify what departments the impacted employees worked in.
- News of the restructuring and layoffs comes a few months after the retailer's CEO retired and about two weeks after the retailer reported its Q2 earnings. Last quarter, e-commerce sales rose 3%, and gross profit of $232 million was up 8%, but Joann’s net sales for the quarter fell 2.1% to $453.8 million year over year.
Dive Insight:
The craft retailer “has been exploring every opportunity to improve profitability, drive top-line growth and operate the business more efficiently,” a spokesperson said in an emailed statement to Retail Dive.
“While any decisions involving team members are extremely difficult and sensitive, we must do what is best for the business,” the statement continues. “We sincerely thank all impacted team members for their work, and these changes complete our structural plans.”
After achieving price concessions from suppliers, Joann is on track to reach $60 million in product cost savings this year, and overall, is on track to reduce supply chain, product and corporate costs by $200 million, sister publication Supply Chain Dive reported.
The Ohio-based company said it employed about 22,000 full-time, part-time, seasonal and temporary workers in January 2022. Joann said it had 829 physical stores in 49 states as of late August.
“Although we remain cautious due to continued uncertainty in the broader retail environment, the strategic shifts we implemented in the second quarter, combined with our ongoing cost reduction strategies, give us confidence we are on track to deliver on our full-year outlook,” Chief Customer Officer Chris DiTullio said during an Aug. 28 earnings call, according to a Seeking Alpha transcript.
DiTullio and Scott Sekella, the chief financial officer, are serving as interim co-leaders of the Office of the CEO following the retirement of CEO Wade Miquelon in May.
“In addition to the top-line sales momentum, we continue to see healthy consumer engagement in our core textiles-related sewing and craft businesses,” Sekella said during the earnings call. “This strength includes positive performance in our sewing technology category, which serves as a leading and underlying indicator for other core categories moving forward.”
Joann reported a Q2 net loss of $73.3 million versus $56.9 million year over year. The company had nearly $1.1 billion in long-term debt as of July 29 and anticipates net sales will be down 1% to 3% for the year.
The company also acknowledged in an Aug. 31 securities filing that it is “not currently in compliance with Nasdaq’s continued listing requirements” and risks being delisted, which could affect Joann’s stock price, liquidity and ability to raise capital.
As the company enters the second half of the year, which includes the critical holiday season, Joann said in an Aug. 24 announcement ahead of its earnings report that it planned to hire more than 5,000 team members. Joann did not immediately respond to a question from Retail Dive asking if the company is still moving forward with its previously announced holiday hiring plans.
