JOANN, a well-known U.S. fabric and craft retailer, is closing hundreds of its stores following its second bankruptcy filing in early 2025.
The company, which has been a staple in the industry for over 80 years, originally filed for bankruptcy in early 2024 before going private. Now, facing continued financial struggles, JOANN has announced plans to close approximately 500 out of its 800 stores across 49 states.
In a statement, JOANN described the closures as a difficult but necessary decision to “right-size its store footprint.” The company conducted an in-depth analysis of store performance and strategic fit before determining which locations would shut down. While JOANN has not publicly released the full list of closures, court filings indicate that 533 stores are set to close, with California, Florida, Michigan, Ohio, and Pennsylvania among the most affected states. Hawaii is the only state not facing any closures.
Despite filing for Chapter 11 bankruptcy on January 15, 2025, JOANN has assured customers and employees that its stores and website will continue operating. The bankruptcy filing is aimed at facilitating a sale process to maximize the company’s value. As part of this process, Gordon Brothers Retail Partners, LLC has been designated as a “stalking horse” bidder, setting a baseline offer for JOANN’s assets while higher bids are still being solicited. If additional qualified offers arise, an auction may take place.
Interim CEO Michael Prendergast acknowledged the challenges JOANN has faced, citing financial difficulties, inventory issues, and ongoing struggles in the retail sector. He emphasized that the court-supervised sale process is the best way forward, with hopes of allowing JOANN to continue operating. He also expressed appreciation for JOANN’s employees, acknowledging their dedication to serving the company’s creative community during these uncertain times.
To maintain operations during restructuring, JOANN has filed motions to continue paying employee wages and benefits. The company has also sought court approval to use cash collateral for liquidity. As part of the Chapter 11 process, JOANN has created a dedicated website to provide information to customers and creditors. Legal and financial advisors, including Kirkland & Ellis, Centerview Partners LLC, and Alvarez & Marsal North America, LLC, are guiding the company through this complex transition.
