Joann Inc. Files for Bankruptcy Again, Seeks Sale Amid Craft Store Closures

DOVER, Del. — Joann Inc., the Ohio-based crafts retailer, filed for Chapter 11 bankruptcy protection for the second time in less than a year on Tuesday, as it seeks to sell its assets and navigate a challenging retail environment. The company, which operates over 800 stores across 49 states, is working with Gordon Brothers Retail Partners LLC as a potential buyer, though liquidation remains a possibility.

Interim CEO Michael Prendergast cited sagging sales, constrained inventory levels, and a difficult retail landscape as reasons for the filing. “After carefully reviewing all available strategic paths, we have determined that initiating a court-supervised sale process is the best course of action to maximize the value of the business,” Prendergast said in a statement. “We hope that this process enables us to find a path that would allow Joann to continue as a going concern.”

Joann first filed for bankruptcy in March 2024 after 81 years in business, becoming a private company shortly afterward. Despite the initial filing, the retailer did not close any of its stores. This time, however, Gordon Brothers has indicated it may liquidate the company, potentially leading to going-out-of-business sales at all locations.

The company is also actively soliciting alternate bids from parties interested in continuing operations. If qualified bids emerge, Joann plans to conduct an auction, with Gordon Brothers’ offer serving as the minimum bid. In the meantime, all stores and the online shop will remain open, and employees will continue to receive pay and benefits.

Joann’s struggles come amid broader challenges in the retail sector. The company, which went public in 2021 at $12 per share, returned to private ownership after its first bankruptcy. At the time, former CEO Scott Sekella noted that 95% of its 815 stores were profitable. However, the retailer has since faced mounting debt, which it reduced by approximately $500 million through restructuring efforts.

Amanda Hayes, Joann’s director of corporate communications, emphasized that recent store closures are part of routine evaluations rather than a mass shuttering. “We also opened new and remodeled locations in recent months, including new stores in Great Falls, MT, and Maplewood, MN,” she said.

At least eight stores across Iowa, North Carolina, Maryland, Pennsylvania, New York, and Massachusetts are set to close in the coming weeks, according to local reports and Retail Dive. Specific closure dates vary by location, with some stores slated to shut their doors as early as Jan. 12.

Joann, known for its fabric, sewing machines, and crafting supplies, has been a staple for DIY enthusiasts since its founding in 1943. Its future now hinges on the outcome of the court-supervised sale process and the potential for a buyer to keep the brand alive.