Joann, one of the most recognised names in the craft and sewing retail industry, is set to close all its stores after failing to secure a sustainable future. The company, which has served customers for over eight decades, faced growing financial pressures in recent years, ultimately leading to its collapse. Following a bankruptcy auction, liquidation now appears inevitable.
This article appeared on Yahoo Finance, reporting on Joann’s impending closure after efforts to rescue the company fell short. While the decision marks the end of an era for the beloved retailer, it also raises broader questions about the survival of traditional craft stores in an evolving retail landscape.
A Failed Rescue and Mounting Debt
Joann’s financial difficulties had been looming for some time, but the scale of its debt made survival increasingly unlikely. The company had already filed for Chapter 11 bankruptcy in March 2024, a move that allowed it to write off over $500 million of its nearly $1.1 billion debt.
The restructuring plan also secured $132 million in financial backing from lenders, ensuring that all 800-plus stores remained open and that the 18,000-strong workforce retained their jobs.
Despite these measures, Joann remained financially vulnerable. In January, the retailer reported $615.7 million in outstanding debt, a burden too heavy to sustain. The bankruptcy auction saw GA Group and Joann’s lenders emerge as the winning bidders, with a plan to liquidate all remaining stores.
As part of the agreement, they will offer a $105 million credit bid for most of the company’s assets, alongside cash considerations to settle debts. Joann’s leadership acknowledged that every possible effort had been made to explore alternative solutions.
“We are committed to working constructively with the winning bidder to ensure an orderly wind-down of operations that minimizes the impact on all our stakeholders,” explained the company.
The Changing Retail Landscape
The closure of Joann highlights the broader challenges faced by brick-and-mortar specialty retailers. In an era where online platforms and digital marketplaces dominate, traditional chains have struggled to maintain profitability.
According to Neil Saunders, managing director of GlobalData, Joann’s brand had become “increasingly broken”, limiting its chances of attracting buyers willing to invest in a turnaround.
“This is not really the type of environment in which companies, including other retailers, want to take a risk by trying to turnaround the company. As such, it is not surprising that liquidation has become the eventual destination.”
The craft and sewing industry itself has undergone significant changes. While demand for DIY and home crafting remains strong, consumers now have more online options for purchasing supplies, often at lower prices and with greater convenience. Joann’s reliance on physical locations ultimately made it vulnerable to these shifting trends.
Could Joann’s Brand Live On?
While Joann’s physical stores are set to disappear, the company’s brand and intellectual property may still hold value. Some analysts suggest that an e-commerce firm could acquire the Joann name and transition it into an online-only business. However, Saunders cautioned that even if this occurs, it would mark the end of Joann.
“Even so, that means that Joann as most people have known it will come to an end.”
For now, the retailer’s remaining stores will begin going-out-of-business sales, clearing out inventory as part of the final wind-down. A court hearing in the U.S. Bankruptcy Court for the District of Delaware is scheduled, which will determine the approval of the sale and liquidation process.
