Joann Crafts Retailer Declares Bankruptcy Amid Dwindling Sales

Joann Inc., a national fabric and crafts retailer with over 800 stores, has filed for Chapter 11 bankruptcy amid financial challenges including a significant debt load, decreasing sales, and rising interest rates. The company, which saw a sales surge during the pandemic, has struggled with the shift in consumer shopping habits post-lockdown and has been impacted by supply chain issues and inflation. In the bankruptcy filing in Delaware, Joann disclosed assets of $500 million to $1 billion against liabilities ranging from $1 billion to $10 billion.

As part of the bankruptcy process, Joann aims to reduce its debt by more than $500 million and has received commitments for approximately $132 million in new capital from lenders. The reorganization plan includes a Transaction Support Agreement with key stakeholders, and if approved by the court, it would result in Joann becoming a privately held company. Consequently, Joann's common stock would be canceled, and the company would be delisted from Nasdaq and other national stock exchanges. The retailer plans to continue operations during the restructuring, which could be completed as soon as next month.