ECONOMY & WORK
MONEY 101
NEWS
PERSONAL FINANCE
NET WORTH
About Us Contact Us Privacy Policy Terms of Use DMCA Opt-out of personalized ads
© Copyright 2023 Market Realist. Market Realist is a registered trademark. All Rights Reserved. People may receive compensation for some links to products and services on this website. Offers may be subject to change without notice.
MARKETREALIST.COM / NEWS

Crafts Retailer Joann Files for Chapter 11 Bankruptcy Amid Shifting Consumer Trends

The bankruptcy filing revealed Joann's total debts exceeding $2.44 billion, with assets totaling around $2.26 billion.
PUBLISHED MAR 20, 2024
Cover Image Source: A typical Jo-Ann store in Henderson, Nevada | Wikipedia
Cover Image Source: A typical Jo-Ann store in Henderson, Nevada | Wikipedia

Fabric and crafts retail giant Joann has sought Chapter 11 bankruptcy protection, citing a combination of reduced consumer spending on discretionary items and shifting interests in pandemic-era hobbies. In an announcement made on Monday, the Hudson, Ohio-based company projected a potential emergence from bankruptcy as early as the end of the following month. Post-restructuring, Joann is anticipated to transition into private ownership, ceasing its status as a publicly traded entity on stock exchanges.



 

Throughout the bankruptcy proceedings, Joann's extensive network of over 800 stores and its online platform will continue to operate without disruption. The company assured vendors, landlords, and other trade creditors of ongoing payment continuity, attributing this assurance to a financial support agreement reached with the majority of its shareholders.

"There is no other retailer with the same ability to serve sewists, quilters, crocheters, crafters, and other creative enthusiasts as we have for the past 80 years, and we take great pride in seeing the passion and engagement of our millions of customers and our team members," Chris DiTullio, chief customer officer and co-lead of the interim office of the CEO, said in a statement.


 
 
 
 
 
View this post on Instagram
 
 
 
 
 
 
 
 
 
 
 

A post shared by JOANN Fabric and Craft Stores (@joann_stores)


 

In conjunction with the bankruptcy filing, Joann disclosed securing approximately $132 million in fresh financing, with plans to slash its funded debt by around $505 million.

"This agreement is a significant step forward in addressing JOANN’s capital structure needs, and it will provide us with the financial resources and flexibility necessary to continue to deliver best-in-class product assortments and enhance the customer experience wherever they are shopping with us," said Scott Sekella, Joann's chief financial officer.



 

Joann's bankruptcy filing coincides with a broader slowdown in discretionary spending and a shift away from home-based crafting activities, contrasting with the surge witnessed at the outset of the COVID-19 pandemic. Neil Saunders, managing director of research firm GlobalData, highlighted this trend, stating, "Crafts, which did extremely well during the pandemic, have fallen back into slight declines as people find other things to do." 

Despite these challenges, Joann faces additional hurdles, including substantial debt and heightened competition. Rivals offering competitive pricing and the availability of craft supplies at mainstream retailers pose significant challenges. 

"There is still a place for Joann, but it’s going to take a lot of work to get back into a stable position," Saunders said. "I think this bankruptcy was always inevitable. And actually, despite the disruption it causes, it’s a very good first step for getting the company back on track."



 

The bankruptcy filing revealed Joann's total debts exceeding $2.44 billion, with assets totaling around $2.26 billion. The retailer underwent privatization in 2011 when Leonard Green & Partners acquired it for approximately $1.6 billion. A decade later, Joann, still predominantly owned by the equity firm, made a return to the public market through an initial public offering priced at $12 per share.

Established in 1943 as a single storefront in Cleveland, Ohio, Joann evolved into a nationwide chain. It rebranded itself as "Joann" on its 75th anniversary, reflecting its enduring presence and commitment to the fabric and crafts community.

MORE ON MARKET REALIST
One can imagine how hilarious it was when the two iconic hosts shared the stage.
3 hours ago
Gwendolyn Osborne said that Carey changed the history of television and set a new standard.
5 hours ago
The player brought his parents on the stage and that made things even more emotionally charged.
6 hours ago
The player did lose everything that he had won but also get another shot and made a stunning recovery.
1 day ago
Steve Harvey has previously shared style tips with fans in a behind the scenes clip.
1 day ago
The founders of "The Long Hairs" made a rocking pitch that had the sharks headbanging.
2 days ago
The family watched the show as a way to help their son learn problem solving skills from the games.
2 days ago
Jonathan Deiersing pitched his innovative men’s padded underwear line, "Rounder Bum" in the Tank.
2 days ago
Drew Carey is talented in a lot of ways and contestants also bring their unique skills on the stage sometimes.
2 days ago
Seacrest was so astonished that he had to test the contestant's strength right then and there.
3 days ago
Drew Carey is quite a sensation when it comes to performing viral dance trends.
3 days ago
The guest initially expected her grandmother's painting to be worth a couple hundred dollars.
3 days ago
The creators of the show apparently went too far with the joke but tried to make up for it too.
4 days ago
The TikTok creator claimed that the recalled products are widely used by low-income and middle-class families.
4 days ago
The star was stopped midway by his partner while fans loved the look.
4 days ago
Viewers couldn't believe what they saw and some even suggested it could be a prank.
4 days ago
Cuban offered the entrepreneur a "geek to geek" offer that he couldn't refuse.
4 days ago
Reports suggest that the anti-theft measures are causing hostility between shoppers and workers.
5 days ago
Seemed like inflation has been eating into the nuggets sold by Walmart under Great Value.
5 days ago
The entrepreneur shared that it was a habit of his to reward the people who worked hard for him.
6 days ago