Joann’s bankruptcy filing arrives amid both a slowdown in discretionary spending overall and during a time consumers are taking a step back from at-home crafts.
FILE – People walk into and out of a Joann store, Sept. 6, 2007, in Garfield Heights, Ohio. The fabric and crafts retailer has filed for Chapter 11 bankruptcy protection, as consumers continue to cut back on discretionary spending. In a Monday, March 18, 2024 release, the Hudson, Ohio-based company said that it expected to emerge from bankruptcy as early as the end of next month.
In addition to Monday’s filing in U.S. Bankruptcy Court, Joann said it had received about $132 million in new financing and expected to reduce its balance sheet’s funded debt by about $505 million. “Crafts, which did extremely well during the pandemic, have fallen back into slight declines as people find other things to do,” Neil Saunders, managing director of research firm GlobalData, told The Associated Press Monday — noting that many are now sacrificing these artsy activites to spend money on experiences outside of the house, such as going out to eat or attending sporting events.
“There is still a place for Joann, but it’s going to take a lot of work to get back into a stable position,” Saunders said. “I think this bankruptcy was always inevitable. And actually, despite the disruption it causes, it’s a very good first step for getting the company back on track.”
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