JOANN, a leading U.S. fabric and craft retailer, is set to close hundreds of its stores after filing for bankruptcy for the second time in early 2025.
The company, which has been a key player in the industry for over 80 years, initially filed for bankruptcy in early 2024 before going private. Now, amid ongoing financial challenges, JOANN has announced plans to shut down approximately 500 of its 800 locations across 49 states.
In an official statement, JOANN described the closures as a difficult but necessary step to “right-size its store footprint.” The decision followed a comprehensive evaluation of store performance and strategic relevance. Although the company has not publicly disclosed the complete list of affected locations, court filings reveal that 533 stores are set to close, with California, Florida, Michigan, Ohio, and Pennsylvania experiencing the most significant losses. Hawaii is the only state unaffected by the closures.
Despite filing for Chapter 11 bankruptcy on January 15, 2025, JOANN has reassured employees and customers that its remaining stores and website will continue operations. The bankruptcy process is designed to facilitate a sale that maximizes the company’s value. Gordon Brothers Retail Partners, LLC has been designated as a “stalking horse” bidder, establishing a baseline offer for JOANN’s assets. The company is still seeking higher bids, which could lead to an auction if qualified offers emerge.
Interim CEO Michael Prendergast acknowledged the company’s struggles, citing financial setbacks, inventory shortages, and persistent retail sector challenges. He emphasized that the court-supervised sale process represents the best opportunity for JOANN to continue operating. Prendergast also expressed gratitude to the company’s employees, recognizing their commitment to serving JOANN’s creative community throughout this turbulent period.
To sustain operations during restructuring, JOANN has filed motions to ensure the continuation of employee wages and benefits. Additionally, the company is seeking court approval to access cash collateral for liquidity. As part of the Chapter 11 proceedings, JOANN has launched a dedicated website to keep customers and creditors informed. Legal and financial advisors, including Kirkland & Ellis, Centerview Partners LLC, and Alvarez & Marsal North America, LLC, are assisting the company through this complex transition.