Joann, the well-known arts and crafts retailer, is set to close about 500 of its 800 stores, the company announced on Wednesday. The move comes as the retailer struggles through bankruptcy proceedings and seeks to restructure its business.
The company is working on a bankruptcy sale of its assets. However, according to court filings, many locations will not attract buyers. This has forced Joann to make the difficult decision to significantly downsize its store footprint.
Bankruptcy and restructuring efforts
Joann filed for Chapter 11 bankruptcy protection in January, marking the second time the company has faced financial turmoil in less than a year. In restructuring terms, a second bankruptcy is often called “Chapter 22.”
As part of its restructuring efforts, Joann has asked a bankruptcy judge for permission to start store-closing sales immediately. The retailer emphasized that reducing the number of locations is necessary to secure a sustainable future.
“Right-sizing our store footprint is a critical part of our efforts to ensure the best path forward for Joann,” the company stated on its restructuring website.
Impact on employees and customers
The closures will significantly impact Joann’s employees, customers, and the communities the stores serve. In a statement to Axios, the company acknowledged the tough decision.
“This was a very difficult decision to make, given the major impact we know it will have on our Team Members, our customers, and all of the communities we serve,” Joann said.
A thorough review of store performance and long-term strategy determined which locations will remain open. Stores that are underperforming or do not fit into Joann’s new business model are set to close.
What happens next?
Joann has a court hearing scheduled for Friday. The company is also seeking permission to stop accepting gift cards two weeks after the court approves its sale.
The arts and crafts retailer is not the only store facing closures in 2025. Several major retailers, including Big Lots, Party City, Kohl’s, and Macy’s, are holding liquidation sales. JCPenney has also confirmed plans to shut down some of its locations by mid-year.
For customers looking to see if their local Joann store is affected, the retailer has posted a list of closing stores on its restructuring website. The document includes details on locations that will be shutting down as part of the bankruptcy process.
As store closings continue to rise, Joann’s financial struggles highlight the broader challenges facing brick-and-mortar retail in today’s market.
