Eighty-two years after its founding, fabric and crafts retailer Joann Inc. said it is going out of business and will be closing all of its stores, according to a Sunday announcement.
The Hudson, Ohio-based retailer filed for Chapter 11 bankruptcy protection in January, the second time in a year. At the time, it cited sluggish consumer demand and inventory shortages but promised to keep all of its stores open.
An auction was recently held to find a buyer and determine Joann’s fate.
Investment firm Gordon Brothers Retail Partners, LLC, which was granted the first bid, said it would pursue a complete liquidation of the company, including the closure of all Joann store locations. Joann said it was still hoping to find a buyer who would continue operating the retailer.
However, the winning bid at the Feb. 21 auction went to Oaktree Capital Management-backed GA Group in partnership with Wilmington Savings Fund Society, the prepetition term loan agent.
Their winning bid allows them to “acquire substantially all of Joann’s assets,” and they have no plans to continue the business or operate all of Joann’s locations.
The auction result is scheduled for court approval on Feb. 27.
The retailer said the dates for store closures or changes to the website will be posted as soon as possible, adding that it expects it will take a “number of weeks to complete our final sales.”
“We are committed to working constructively with the winning bidder to ensure an orderly wind-down of operations,” Joanna said.
According to legal documents, GA Group has the option to offer retention bonuses or severance pay to employees who stay with Joann until the end of their employment.
Employees will be given a 7-day notice as stores wind down and close.
The bid structure addresses the existing financial challenges while ensuring that Joann’s creditors, particularly the secured ones, will be paid in full.
Joann had been facing financial difficulties for many years. Though the COVID-19 pandemic saw increased revenues with people stuck at home during the lockdowns, sales pummeled once normal life resumed. The retailer eventually saw its debt balloon to $1 billion.
Joann filed for Chapter 11 bankruptcy for the first time in March 2024. It managed to secure a restructuring deal with most of its financial stakeholders and other partners, who together pledged $132 million in new funding to reduce Joann’s debt by $505 million as the company went private.
Joann’s closure ends a chapter in American hobby retail. The company began as a fabric shop in Cleveland, Ohio, in 1943, established by three German immigrant couples—the families Reich, Rohrbach, and Zimmerman. It soon became a familiar destination for generations of sewists, quilters, crocheters, crafters, and other creative enthusiasts.
The company joined the American Stock Exchange in 1969 and went public on the Nasdaq market in 2021.
