Facing significant liquidity challenges and persistent pressure from the retail environment, Joann Fabrics, a leading craft and fabric retailer, has filed for Chapter 11 bankruptcy protection for the second time in less than a year. Despite efforts to improve its financial standing after a previous bankruptcy filing, Joann is struggling to maintain operations due to dwindling cash reserves. The company is seeking a buyer and anticipates receiving additional offers.
Joann Fabrics, a prominent name in the retail fabric and craft industry, has once again sought Chapter 11 bankruptcy protection. This marks the second time within a year that the company has turned to bankruptcy courts for financial relief. Despite efforts to address operational challenges and improve inventory management following its emergence from a previous bankruptcy filing just six weeks prior, Joann is grappling with severe liquidity constraints.
The company's interim CEO, Michael Prendergast, stated in a news release that these difficulties, combined with persistent obstacles within the retail landscape, have left Joann with no alternative but to file for bankruptcy protection once more. According to court documents, Joann carries a substantial debt burden of $615.7 million in funded obligations. Gordon Brothers Retail Partners, a financial firm known for its involvement with struggling retailers, such as Big Lots, has extended an initial bid for Joann, although the company anticipates receiving additional offers.Founded over 80 years ago, Joann operates a vast network of approximately 800 stores spread across 49 states, supported by four distribution centers. The company's headquarters are located in Hudson, Ohio. While Joann has refrained from commenting on potential store closures, it has already closed eight locations in six different states over recent months, according to Retail Dive. Joann's recent bankruptcy filing adds to the growing list of specialty retailers facing financial distress and store closures. Coresight Research projected in December that over 7,300 store locations would shutter by the end of 2024, a significant increase from the approximately 5,500 closures anticipated previously.Joann's predicament mirrors the struggles experienced by other prominent retailers in recent months. Party City, a major player in party supplies and holiday decorations, announced its closure and the permanent shutting down of all its stores in December. Big Lots, a discount retailer, also initiated liquidation proceedings for all its 900 stores, but subsequently found a buyer who committed to keeping at least 200 stores open, potentially salvaging thousands of jobs. Even The Container Store, a retailer specializing in storage solutions, filed for bankruptcy in the days leading up to Christmas, although it stated there were no immediate plans for layoffs or store closures.
BANKRUPTCY RETAIL JOANN FABRICS CHAPTER 11 LIQUIDITY STORE CLOSURES
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