Joann Fabrics, the well known fabric and crafts retailer that began in Hudson, Ohio, is set to close approximately 500 of its stores in 49 states as part of its ongoing Chapter 11 bankruptcy proceedings. This decision came after the company filed for bankruptcy for the second time in less than a year, stating challenges such as sluggish consumer demand and inventory shortages. The closures will impact thousands of employees, including over 600 at corporate headquarters and additional fulfillment center jobs.
Going-out-of-business sales are expected to begin on Saturday and may last for several months. While gift cards will still be accepted for in-store purchases, they will not be valid for online shopping. The Ohio-based company, which operates more than 800 stores, declared bankruptcy in March 2024 while reporting over $1 billion in debt. In court documents, Joann blamed higher costs from shipping overseas products and waning consumer demand. The closures are part of a broader restructuring effort aimed at maximizing the business's value as it seeks potential buyers amid rising operational costs and increased competition from larger retailers.
Joann's financial troubles have been clear in its stock performance. After going public in March 2021 at $12 per share, the company's stock steadily declined to below $1 by early 2024. Following its first bankruptcy filing, Joann was delisted from NASDAQ and briefly traded over-the-counter before emerging as a private company in August 2024. However, this restructuring proved insufficient, leading to the current second bankruptcy and massive store closure plan.
Joann now joins a growing list of struggling retailers forced to close locations or file for bankruptcy given changing consumer habits and economic pressures. Companies like Big Lots, Express, Party City, Macy's, JCPenney and Walgreens are also closing hundreds of stores this year as the retail industry faces experiences challenges from inflation, high operating costs, and declining discretionary spending. Over 15,000 stores are expected to close in 2025, more than double last year's total, marking what some call the "retail apocalypse".
Read the article here: Joann moves to close 500 of its stores across the US amid bankruptcy
3 comments:
Joann Fabrics having stock under $1 is crazy, but to be honest I would only ever go there with my grandma and even then it was always so empty. Still sad that a lot of familiar stores are closing down. Party City makes sense to me especially with the poor quality of goods and seasonal turns of holidays. People definitely order their party and halloween stuff on Amazon now.
I think we all know the inevitable when it comes to these previous big box retailers. People haven't wanted to in person shop in years and these stores cannot handle the low prices and overhead that come with online stores. I am worried we will get to a point where there will be a sole provider (Amazon) in the retail space.
It is kind of sad hearing about all of these companies closing especially because they were a big part of our childhood. I find it hard to believe that everything Joann sells can be easily replaced by online stores though. Some of their products need to be seen and felt in real life for a customer to buy. This has me wondering if there will be a rise in small businesses to fulfill the physical aspect that online shopping cannot provide.
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