Joann Files for Bankruptcy – But Will Minnesota Stores Remain Open?
For all my fellow crafters and makers out there, I have some news that may cause initial concern but ultimately relief. Our beloved craft retailer Joann, formerly known as Jo-Ann Fabrics and Crafts, has filed for Chapter 11 bankruptcy protection.
But don’t panic just yet – the company has assured that all 850 of its stores across the U.S. will remain open during the restructuring process.
Declining Sales Necessitate a Revamp
Like many retailers, Joann has been impacted by declining sales as consumers tighten their discretionary spending due to rising inflation over the past couple years.
After a pandemic-fueled crafting boom in 2020, sales have slipped, falling 4.1% in Q3 2023. This necessitated layoffs and has now led to a bankruptcy filing.
The good news is that Joann has secured $132 million in new financing to facilitate its restructuring. The deal will reduce the company’s $1 billion debt load and transition it to becoming privately owned again after just a 3-year stint as a publicly-traded company.
No Changes (Yet) for Minnesota Joann Locations
For those of us here in the Land of 10,000 Lakes, Joann’s bankruptcy announcement sparked immediate concerns about the future of its 21 Minnesota locations, including 9 in the Twin Cities metro area.
After all, Joann is a crafter’s paradise that stocks all the supplies we need for sewing, quilting, crocheting, and more.
However, the company has firmly stated that the bankruptcy process will not disrupt any services.
Chris DiTullio, Joann’s COO, emphasized that 95% of stores remain cash-flow positive, showing the company’s commitment to its crafting niche.
A Crafty Restructuring Plan
While services won’t change for now, analysts suggest Joann still has work to do to get back on track. Weakening store conditions, declining customer service, and competition from low-cost rivals like Hobby Lobby, Michaels and fabric stores have hurt the brand.
The bankruptcy process allows Joann to streamline operations, cut debt, and hopefully restore the exceptional in-store experience that made it a crafter’s haven for decades. A return to private ownership may also help bring more flexibility and focus.
For now, us Minnesota makers can keep visiting our local Joanns for crafting supplies and inspiration. I’ll be eagerly following the company’s restructuring journey and keeping you all posted on any changes.
But for the time being, let’s appreciate that our beloved craft stores remain open and celebrate that fact with our latest handmade creations!
*Featured Image from ajay_suresh CC BY 2.0 DEED via Flickr
