Fabric and crafts store Joann plans to shutter more than half of its national footprint as it works through its second Chapter 11 bankruptcy within a year.
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The retailer plans to close roughly 500 of its approximately 800 stores across 49 states, the Associated Press reports. The closures of “underperforming” locations, announced in a bankruptcy motion Wednesday, must first be approved by a judge.
“Right-sizing our store footprint is a critical part of our efforts to ensure the best path forward,” the company told the AP in a statement.
Joann initially filed for bankruptcy last March and emerged as a private company just six weeks later with its debt cut in half. But that wasn’t enough.
In January, the company voluntarily reentered the bankruptcy process to find a buyer for the business and pay back its lenders, who are owed more than $450M.
Joann, along with other craft stores, benefited from the pandemic, which pushed consumers to spend on at-home activities. Many Americans, squeezed by inflation, have since cut such discretionary spending.
Upon refiling for bankruptcy, Joann interim CEO Michael Prendergast said in a court declaration that “unanticipated inventory challenges post-emergence, coupled with the prolonged impact of an excessively sluggish retail economy, put [Joann] back into an untenable debt position.”
Many other retailers have faced similar challenges. Approximately 7,100 store closures were announced nationwide through the end of November 2024, according to data by CoreSight, far outpacing the total from 2023.
Other bankruptcies have added to that figure in the months since. Party City, which entered bankruptcy in December, has already offloaded more than 250 leases.
Restaurant chain Denny’s, which is not in bankruptcy, is also reevaluating its portfolio. After closing 88 restaurants last year, it plans to scrap as many as 90 more this year.
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