Crafts retailer JOANN filed for Chapter 11 bankruptcy on Monday.
The company, which is known for selling craft supplies, home decor, and sewing supplies, has over 800 stores nationwide.
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Driving the news: The bankruptcy filing will allow Joann to continue operating while it repays its debts, meaning no stores or online shopping is expected to be affected by the filing.
- According to court documents, Joann cited increasing interest rates and decreasing sales after a spike in sales during the COVID-19 lockdown in 2021 and 2022.
- JOANN held over $1 billion in funded debt on Monday.
What we’re watching: The company is expected to receive around $132 million in new capital and reduce its debt by over $500 million.
- Joann expects to complete the Chapter 11 process as early as late April and become a private company.
- Shares will no longer be listed on Nasdaq or other national stock exchanges following the process.
What they’re saying: “Over the past several months, JOANN has made meaningful business improvements through the execution of our Focus, Simplify and Grow cost reduction initiative,” said CEO Chris DiTullio in a statement.
- “We are excited by our progress on both top and bottom-line initiatives in the past year and are confident the steps we are taking will allow JOANN to drive long-term growth. We appreciate the support from our financial and industry stakeholders in this agreement, and their confidence in our ability to continue driving positive business change. 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.”
