Crafts retailer Joann files for bankruptcy for a second time

For the second time in less than a year, Joann Inc. has filed Chapter 11 bankruptcy protection. This time, it is also trying to sell itself to another company in an attempt to “maximize the value of its business”.

Interim CEO Michael Prendergast said Tuesday that the Ohio-based craft retailer was struggling with a tough trading environment.

That, combined with declining sales and limited inventory levels, prompted the company to file for bankruptcy protection again in the U.S. Bankruptcy Court for the District of Delaware.

In March 2024, the company filed for Chapter 11 for the first time after 81 years in business, and has since closed none of its more than 800 locations in 49 states.

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“After carefully examining all available strategic avenues, we have determined that initiating a court-supervised sale process is the best course of action to maximize the value of the business,” Prendergast said Joan will continue to act as an ongoing activity”.

A customer walks into a Joann’s store in El Cerrito, California, USA, Wednesday, January 8, 2025. (David Paul Morris/Bloomberg via Getty Images/Getty Images)

The company said it is seeking court approval to begin the process of selling essentially all of its assets to Gordon Brothers Retail Partners LLC. , often before the formal auction process begins.

According to Joan, Gordon Brothers has indicated that it intends to pursue the liquidation of the company and sell off all stores.

Joann Fabrics store in Wyomissing, Pennsylvania. (Tim Leedy/MediaNews Group/Reading Eagle via Getty Images/Getty Images)

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The company continues to solicit alternative bids. It says it has received inquiries from parties potentially interested in continuing the stores and online businesses on an ongoing basis.

If other qualified bids are submitted during the court-supervised sale process, Joan plans to hold an auction or auctions, with the chase horse bid setting the floor. for auction processes.

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In the meantime, the company plans to keep all of its stores open. His online store will also continue to operate as normal. The company said its employees will continue to receive wages and benefits.