Joann, an 82-year-old retailer known for fabric and craft supplies, has announced its second Chapter 11 bankruptcy filing within a year, citing financial and inventory challenges.

The company initially filed for bankruptcy in March 2024 in Delaware, having secured around $132 million in new financing, which helped to reduce its total debt from $1 billion by about $500 million. On Wednesday, the Ohio-based company issued a statement regarding its latest bankruptcy filing and plans to “facilitate a sale process to maximize the value of its business.”

“Since transitioning to a private entity in April, the Board and management have been focused on cost management and value enhancement,” said Michael Prendergast, Joann’s interim CEO. “However, the retail landscape has faced numerous significant challenges over the past few years, and combined with our current financial situation and limited inventory, we had no choice but to take this action.”

Despite the announcement of voluntary Chapter 11 proceedings, Joann stated that its stores and website remain “open as usual and continue to serve customers.”

Here’s what you need to know about Joann’s bankruptcy and potential future steps for the struggling retailer.

What Does Bankruptcy Mean for Joann?

Joann is looking for court approval to sell most of its assets, according to the retailer’s announcement.

Gordon Brothers Retail Partners, LLC, which recently acquired a significant portion of Big Lots, is expected to be the initial bidder to purchase Joann, as mentioned by the company. The planned sale of Joann will be “subject to higher and better offers,” as the company continues to seek other bids.

Should additional qualified proposals emerge during the court-managed selling process, Joann intends to hold an auction or auctions. In this situation, the initial bidder, Gordon Brothers Retail Partners, would set the baseline for the auction.

Joann Announces Store Closures Amid Financial Troubles

Joann operates over 800 stores in 49 states, but recently, Retail Dive reported that at least eight locations in Iowa, North Carolina, Maryland, Pennsylvania, New York, and Massachusetts are set to close.

Amanda Hayes, Joann’s director of corporate communications, told Retail Dive that the closures are part of regular store location assessments and optimization plans. She added that Joann has recently opened new and remodeled locations, including new stores in Great Falls, MT, and Maplewood, MN.

Joann has not revealed the exact dates of the upcoming closures. However, local news outlets in several states reported closing dates ranging from January 12 to January 19. An employee at the Owings Mills, Maryland store indicated it will close on January 19.

According to Retail Dive, along with confirmations provided to YSL News, the closing stores include locations at:

• Maryland: 10377 Reisterstown Rd, Owings Mills
• Massachusetts: 2267 Northampton St., Holyoke
• New York: 2309 N Triphammer Rd, Ithaca
• North Carolina: 2102 US Hwy 70 SE, Hickory
• Iowa: 3200 Agency Street, Ste 110, Burlington
• Pennsylvania: 2481 E State St, Hermitage and 1746 E 3rd St, Williamsport

Who Owns Joann?

Founded in 1943, Joann offers a variety of craft supplies, including fabric by the yard, sewing and Cricut machines, yarn, home decor items, and more.

The company was taken private in 2011 when acquired by equity firm Leonard Green & Partners for approximately $1.6 billion. In 2021, while still largely owned by Leonard Green & Partners, Joann went public with an initial share price of $12.

Following its first bankruptcy filing, Joann transitioned back to a private company in April, resulting in its shares being removed from the Nasdaq and other stock exchanges.

Contributors: Mary Walrath-Holdridge & Emily DeLetter