Joann, the struggling crafts and fabrics retailer, has filed for bankruptcy again, seeking a buyer to prevent liquidation. The company faces over $450 million in debt and a possible auction to determine its fate.
Joann , the well-known crafts and fabrics chain, has taken the difficult step of filing for bankruptcy for the second time in less than a year. The Ohio-based company initially filed for bankruptcy in March 2024, restructuring and becoming a private company the following month to preserve its U.S. store operations. Now, Joann is actively seeking a buyer to prevent its liquidation.Court documents obtained by Bloomberg reveal a proposed deal with lenders owed over $450 million.
Under this agreement, Joann would be obligated to hold an auction within 30 days or risk losing access to funds currently held as collateral. Bloomberg further reports that Joann requires court approval for the sale process. The company has received an offer from Gordon Brothers Retail Partners, a prominent liquidator, which would serve as the initial bid. Court documents outline that if a higher offer emerges before February 12th, Joann will proceed with an auction. However, if no superior bid is received, the company will be obligated to sell to Gordon Brothers. Joann's financial situation is precarious; Chapter 11 documents filed on Wednesday in a Delaware court disclose $615.7 million in funded debt obligations and an additional $133 million in outstanding trade debt. In a press release obtained by CNN, interim CEO Michael Prendergast acknowledged the challenges faced by the retail industry in recent years, stating that these, coupled with their current financial position and constrained inventory levels, necessitated this course of action. Currently, Joann operates 850 stores nationwide, and both physical locations and the company's website will remain open during the ongoing sales process. Founded in 1943, Joann's initial bankruptcy filing in March 2024 revealed over $2.44 billion in total debts and approximately $2.26 billion in total assets. During that filing, Joann stated they had secured commitments for approximately $132 million in new financing and anticipated reducing their debt by roughly $505 million. However, the company did not address the specific reasons behind their increased debt. The Associated Press reported last year that consumers have been scaling back spending on non-essential items due to inflation
BANKRUPTCY RETAIL JOANN DEBT LIQUIDATION AUCTION CRAFTS FABRICS
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