Joann Inc., which filed for Chapter 11 bankruptcy protection in January for the second time in less than a year, is planning to close hundreds of its stores as it tries to right-size its footprint.
The retailer filed a motion this week seeking the court’s authority to begin closing 500 of its stores across the nation as it proceeds with the Chapter 11 process. If approved, the company said going-out-of-business sales will begin at impacted stores as soon as Saturday, and could continue for several months thereafter.
A company spokesperson told FOX Business that the closures are part of the company’s strategy in maximizing the value of its business.
MAJOR CRAFTS RETAILER FILES FOR BANKRUPTCY
“A careful analysis of store performance and future strategic fit for the Company determined which stores should remain operating as usual at this time. Right-sizing our store footprint is a critical part of our efforts to ensure the best path forward for Joann,” the spokesperson said.
In March 2024, when the company filed for Chapter 11 for the first time after 81 years in business, it became a private company, but didn’t shutter any of its over 800 locations across 49 states.
In January, the company filed for bankruptcy protection in U.S. Bankruptcy Court for the District of Delaware with the hopes of selling itself to another company after contending with a challenging retail environment, coupled with sagging sales and constrained inventory levels.
LEASES FOR NEARLY 700 PARTY CITY LOCATIONS TO BE AUCTIONED OFF
“After carefully reviewing all available strategic paths, we have determined that initiating a court-supervised sale process is the best course of action to maximize the value of the business,” interim CEO Michael Prendergast said when the company filed for the second time. “We hope that this process enables us to find a path that would allow Joann to continue operating as a going concern.”
The company sought court approval last month to start a process for the sale of substantially all of its assets to Gordon Brothers Retail Partners LLC. Gordon would serve as the “stalking horse” bidder, which is a party that agrees to make an initial bid for the assets of the bankrupt company, often before a formal auction process begins.
Gordon Brothers has indicated that it intends to pursue a liquidation of the company and conduct going out-of-business sales at all store locations, according to Joann, which is continuing to actively solicit alternate bids.
It said it has received inquiries from parties potentially interested in continuing to operate the stores and online businesses on an ongoing basis.
If other qualified bids are submitted during the court-supervised sale processes, Joann plans to conduct an auction or auctions, with the stalking horse bid setting the floor for the auction processes.
Here are the stores closing in each state:
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