(WJET/WFXP) — Crafts store JOANN officially requested Chapter 11 bankruptcy on Monday. The company, which has more than 800 stores across the country, is popular for selling craft materials, home decorations, and sewing supplies.
The filing allows JOANN to keep running while it pays off its debts, so there shouldn't be any impact on its stores or online shopping, as stated in a press release. Furthermore, any responsibilities to employees, suppliers, landlords, and other business creditors will be fulfilled in full or otherwise resolved.
According to legal documents, JOANN attributed its decision to increasing interest rates and declining sales following a surge in sales during the COVID-19 lockdown in 2021 and 2022. Despite efforts to cut costs in June 2023, the company had over $1.06 billion in funded debt at the time of filing.
The company is expected to obtain roughly $132 million in new funds and reduce its debt by more than $500 million.
JOANN anticipates completing the Chapter 11 process as soon as late April 2024, pointing to strong support from its financial stakeholders. After this process, the company will likely become privately owned, and its shares will no longer be listed on Nasdaq or other national stock exchanges, according to the press release.
“Over the past several months, JOANN has made meaningful business improvements through the execution of our Focus, Simplify and Grow cost reduction initiative. We are excited by our progress on both top and bottom-line initiatives in the past year and are confident the steps we are taking will allow JOANN to drive long-term growth. We appreciate the support from our financial and industry stakeholders in this agreement, and their confidence in our ability to continue driving positive business change.”
Chris DiTullio, Chief Customer Officer and co-lead of the Interim Office of the CEO
For further details on the company's future plans, you can visit https://www.joannforward.com/
