Dive Brief:
- Joann will shut down all of its stores, pending court approval, the company said in a Sunday statement. The move follows a bankruptcy auction in which the winners, GA Group and the retailer’s lenders, said they will initiate going out of business sales at all locations.
- Court documents show GA Group and the lenders will offer cash consideration to pay Joann’s lenders in full. The retailer reported $615.7 million in debt in January. The winning bidders will also offer an additional $105 million credit bid for most of the company’s assets.
- “Joann leadership, our board, advisors and legal partners made every possible effort to pursue a more favorable outcome that would keep the company in business,” the company said. “We are committed to working constructively with the winning bidder to ensure an orderly wind-down of operations that minimizes the impact on all our stakeholders.”
Dive Insight:
Joann stores will likely disappear from the physical retail landscape after two bankruptcies in 10 months, bringing an end to 82 years of retail operations. A sale approval hearing is scheduled for Wednesday in U.S. bankruptcy court for the District of Delaware.
“With a mountain of debt and a brand that has become increasingly broken, the pathways for survival have closed for Joann,” Neil Saunders, managing director of GlobalData, told Retail Dive in an email. “This is not really the type of environment in which companies, including other retailers, want to take a risk by trying to turnaround the company. As such, it is not surprising that liquidation has become the eventual destination.”
Looking ahead, Saunders said it’s possible that someone might step forward to buy the Joann’s brand or intellectual property “but few will want to pay a premium for it.” And while an e-commerce group may buy Joann and turn it into an online only business, “even so, that means that Joann as most people have known it will come to an end,” he said.
Scott Carpenter, GA Group’s Retail, Wholesale & Industrial Solutions’ CEO, and Tim Shilling, president of that division, did not immediately respond to Retail Dive’s request for comment on what issues made Joann’s operation as a going concern untenable.
The craft and sewing retailer first filed for Chapter 11 in March 2024 and concluded the process about a month later. Under that restructuring, the court allowed Joann to write off over $500 million of the company’s nearly $1.1 billion in debt. The company kept all of its 800-plus stores open, retained the jobs of about 18,000 employees with the aid of $132 million from its lenders, and went private.
By the start of this year, it closed a handful of stores and sought bankruptcy protection again in January, citing unexpected inventory challenges and “the prolonged impact of an excessively sluggish retail economy.” Earlier this month, Joann received court approval to close over half of its brick-and-mortar locations nationwide — about 500 overall — which have already started going-out-of-business sales.
Founded in 1943 by German immigrants, the Ohio-based company had grown to 500 stores by 1980. In 2024, Joann’s net sales reached $2 billion, most of which was in the arts, crafts and home decor categories, with the balance in sewing and non-merchandise services.
