Crafts retailer Joann closing down all U.S. stores, one month after filing Chapter 11 bankruptcy

Joann Inc., which has supplied crafty Americans with art supplies and fabrics for decades, recently announced that it plans to close all of its U.S. stores, just a month after filing Chapter 11 bankruptcy protection.

In a statement obtained by Reuters on Sunday, the 82-year-old company announced its plans to sell all assets to a buyer group. Joann executives originally hoped that a buyer would continue its business, but the highest bidder is slated to start going-out-of-business sales at all locations.

As of January, Joann had over 800 U.S. retail locations, though hundreds of those closed last month. As recently as last month, the company also had $538.3 million in inventory and employed 19,000 people across all U.S. states except for Hawaii.

But the company also reported $615.7 million in debt when it filed for Chapter 11 bankruptcy, including over $133 million owed to its suppliers. The monthly cost of running its hundreds of locations amounted to $26 million in monthly rent alone.

MAJOR CRAFTS RETAILER FILES FOR BANKRUPTCY

Court documents also show that Joann recently faced issues with its suppliers, which had eliminated certain products that the chain relied on. At the same time, yarn and sewing item deliveries became unpredictable, threatening Joann’s reputation as an all-in-one shop for crafting enthusiasts.

In January, the company began closing around 500 of its locations. A company spokesperson told FOX Business that the closures were a step towards maximizing the value and longevity of its business. 

LEASES FOR NEARLY 700 PARTY CITY LOCATIONS TO BE AUCTIONED OFF

“A careful analysis of store performance and future strategic fit for the Company determined which stores should remain operating as usual at this time,” the representative explained. “Right-sizing our store footprint is a critical part of our efforts to ensure the best path forward for Joann.”

Joann’s recent announcement comes after a difficult year for the company. In March 2024, it filed for Chapter 11 for the first time in its history, though it avoided closing any of its 800 locations at the time.

Customers with Joann gift cards are allowed to use them until Feb. 28. The closure of the remaining Joann stores will be phased out over the next few weeks to minimize disruption to vendors, customers and employees.

Reuters and FOX Business’ Danielle Genoverse contributed to this report.