Joann Inc., a well-known craft and fabric retailer, has announced that it will close all its U.S. stores. This decision comes just one month after the company filed for Chapter 11 bankruptcy.
Reasons for Joann’s Closure
Joann, which has been in business for 82 years, struggled with financial problems that led to this decision. Some key factors include:
High Debt: The company had $615.7 million in debt, including over $133 million owed to suppliers.
Operating Costs: Running its stores cost Joann around $26 million per month in rent alone.
Supply Issues: Joann faced challenges in getting products like yarn and sewing items, which hurt its reputation.
Failed Sale Attempt: The company hoped to find a buyer to keep some stores open, but the highest bidder decided to close all locations instead.
(Sources: Reuters, FOX Business)
What Happens Next?
Store Closures: Joann had over 800 locations across the U.S. in January. About 500 stores had already begun closing, and now all remaining stores will shut down over the next few weeks.
Liquidation Sales: Going-out-of-business sales will start soon in all Joann stores.
Gift Cards: Customers can use Joann gift cards until February 28, 2025.
Court Approval: The company will seek final approval of the sale in a bankruptcy court hearing in Wilmington, Delaware.
(Sources: Reuters, FOX Business)
Company Statement on the Closure
A Joann spokesperson told FOX Business that the decision to close stores was made after careful analysis. The goal was to ensure the best outcome for the business and its stakeholders. The company had initially tried to restructure by closing some stores, but financial struggles made a full shutdown necessary.
Impact on Employees and Customers
Joann had 19,000 employees across the U.S. (except Hawaii). Many will lose their jobs as stores close.
Customers will have a short time to use gift cards and take advantage of clearance sales before stores shut down completely.
(Sources: FOX Business, Reuters)
Conclusion
Joann’s closure marks the end of an era for craft lovers in the U.S. The company faced major financial struggles and was unable to find a buyer to save it. Customers should act fast to use their gift cards and take advantage of closing sales before all stores shut down in the coming weeks.
