Major Retailer Files for Chapter 11 Bankruptcy After 81 Years in Business
The nationwide crafts and fabrics retailer Joann filed for bankruptcy on Monday but expects to remain open as it attempts to pay down its ballooning debts.
NBC News reported the Ohio-based company, which first opened its doors 81 years ago, is staring down the barrel of an estimated $1 billion in debt during a time of economic uncertainty.
However, the company is not waving the white flag and intends to navigate its current troubles and to keep all of its locations and its website open.
Joann Fabrics and Crafts has filed for Chapter 11 bankruptcy as it seeks to reorganize its finances. https://t.co/C07z1azI6W
— NBC News (@NBCNews) March 18, 2024
In a Monday statement that coincided with the bankruptcy protection filing, Joann said it will honor its commitments to its employees, customers and vendors.
“Customers, vendors, landlords, and other trade creditors will not see any disruption in services,” the company vowed. “The Company remains as focused as ever on providing customers with quality products and services that inspire their creativity.”
According to CNN Business, Joann intends to use the bankruptcy to reorganize and stay open for the long haul.
It has secured funding that will cut the $1 billion in debt in half.
The company has struggled for years but saw a resurgence in popularity during the COVID pandemic when more Americans were at home and working on projects. But since the end of the pandemic, Americans have less money to spend due to rising inflation.
Joann does not plan to close any of its roughly 850 nationwide stores.
Instead, a restructuring will attempt to help it keep up with its competitors such as Hobby Lobby, which offers more affordable prices for home goods.
Joann Chief Financial Officer Scott Sekella said in a statement obtained by CNN Business that the company has every intention to survive.
“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,” Sekella said.
Joann went public in 2021 and had been listed on the NASDAQ for the last three years as JOAN.
As part of the bankruptcy, the company will revert to being a privately-owned company.
The company has since been delisted from the NASDAQ and trading of its shares was halted just after 11 a.m. ET.
Joann’s shares were trading at more than $16 in May 2021, NBC reported. By Monday morning, the shares had tumbled to being valued at less than $1.
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