Fabrics and crafts retailer Joann files for bankruptcy

Joann, the nationwide fabric and craft retailer, filed for bankruptcy, pledging that the decision will "drive long-term growth" and that its stores will remain open for business.

Joann, the Hudson, Ohio-based chain that has operated for more than 80 years, said Monday it reached a deal for its stakeholders to give the company $132 million, which could then reduce its debt by $505 million. The agreement is expected to result in Joann being removed from the stock exchange and becoming a private company.

Joann CFO Scott Sekella said the decision is a "significant step forward" and "will provide us with the financial resources and flexibility necessary to continue to deliver best-in-class product assortments." 

Sekella also said that of the more than 800 Joann stores across the U.S., 95% are cash flow positive. The stores and the company's website are expected to remain open for business and operate as normal.

The decision comes after the retailer saw a temporary boom in sales early in the COVID-19 pandemic, which has since declined. Joann's latest financial report, which was released in December, stated that net sales declined by 4.1% in the third quarter of fiscal year 2024 compared to the same time period the previous year. 

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