Fabric and crafts retailer Joann has filed for Chapter 11 bankruptcy protection, reports the AP, as consumers continue to cut back on discretionary spending. In a Monday release, the company based in Hudson, Ohio, said that it expected to emerge from bankruptcy as early as the end of next month. Following this process, Joann will likely become privately owned by certain lenders and industry parties, the company said. Joann's more than 800 stores and its website will continue to operate normally during the bankruptcy process. Vendors, landlords, and other trade creditors should also not see any pay disruptions, the company said, pointing to a deal it had struck with most of its shareholders for financial support.
In addition to Monday's filing in US Bankruptcy Court, Joann said it had received about $132 million in new financing and expected to reduce its balance sheet's funded debt by about $505 million. Scott Sekella, Joann's Chief Financial Officer and co-lead of the CEO's interim office, said the the transaction support agreement marked a "significant step forward" in addressing the company's capital structure needs.
Joann listed more than $2.44 billion in total debts and about $2.26 billion in total assets in Monday's Chapter 11 petition, which was filed in Delaware, citing October 2023 data. The company, which was founded back in 1943, previously went private in 2011—when it was purchased by equity firm Leonard Green & Partners for about $1.6 billion. A decade later Joann, still majority owned by Leonard Green & Partners, went public in an initial public offering at $12 a share. (More Chapter 11 stories.)
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