Joann going out business, to close all stores nationwide
Joann will wind down operations after 82 years in business.
On the heels of a “comprehensive” sale process and auction, retail liquidator GA Group and Joann’s lenders were selected as the winning bidder to acquire substantially all the assets of the crafts and fabrics retailer. In January, Joann filed for bankruptcy, with plans to seek a buyer that would keep it in operation. It was the chain’s second filing in less than a year.
As part of the deal, and subject to bankruptcy court approval of the transaction, GA plans to begin winding Joann’s operations and conduct going-out-of-business sales at all store locations. The news comes after Joann, earlier this month, said it planned to close about 500 of its approximate 800 stores nationwide as it continued to seek a buyer.
A sale approval hearing is scheduled for Wednesday in U.S. bankruptcy court for the District of Delaware.
“Joann leadership, our board, advisors and legal partners made every possible effort to pursue a more favorable outcome that would keep the company in business,” the retailer said in a statement. “We are committed to working constructively with the winning bidder to ensure an orderly wind-down of operations that minimizes the impact on all our stakeholders. We deeply appreciate our dedicated team members, our customers and communities across the nation for their unwavering support for more than 80 years.”
According to court documents in its most recent Chapter 11 filing, Joann had $615.7 million of funded debt obligations as well as $133 million of trade debt due and outstanding.
In court documents, Joann blamed “unexpected” and “acute” inventory issues, and said it faced an “unexpected ramp-down, and, in some cases, the entire cessation of production” of important items that shoppers come to the store for. The issues took a big bite out of sales and put its $615 million debt in an “untenable position.”
“The last several years have presented significant and lasting challenges in the retail environment, which, coupled with our current financial position and constrained inventory levels, forced us to take this step,” interim CEO Michael Prendergast stated in January in a release.
