In a significant move affecting the retail landscape, Joann Fabrics and Crafts has announced plans to close approximately 500 of its 800 stores across the United States.
This decision comes as the company navigates its second Chapter 11 bankruptcy filing within a year, aiming to restructure and stabilize its financial standing.
Background of Joann’s Financial Challenges
Joann, headquartered in Hudson, Ohio, initially filed for Chapter 11 bankruptcy protection in March 2024. The company managed to emerge as a private entity shortly after, maintaining all its store operations.
However, persistent financial difficulties, exacerbated by inventory shortages and a decline in consumer spending, led to a second bankruptcy filing in January 2025.
Interim CEO Michael Prendergast cited ongoing inventory issues and a sluggish economy as significant contributors to the company’s untenable debt.
Details of the Store Closures
The planned closures span all 50 states, with certain regions more heavily impacted. States such as California will see 61 stores closing, while Florida faces 36 closures. Other affected states include Michigan, Ohio, and Pennsylvania, each with 33 stores slated to shut down.
In Kansas, three locations are set to close:
- Wichita: 3665 North Rock Road
- Lawrence: 2108 West 27th Street
- Salina: 2259 South 9th Street
The company emphasized that “right-sizing our store footprint is a critical part of our efforts to ensure the best path forward.” This strategic move aims to focus resources on more profitable locations and streamline operations.
Impact on Employees and Communities
The closures are expected to have a substantial impact on employees and local communities. While the exact number of affected employees has not been disclosed, Joann employs approximately 19,000 people across its operations.
The company acknowledged the difficulty of the decision, stating, “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.”
Factors Contributing to the Decision
Several factors have contributed to Joann’s financial struggles:
- Inventory Shortages: The company faced unexpected reductions and, in some cases, complete halts in the production of critical products, leading to inventory issues.
- Decline in Consumer Spending: Economic challenges, including inflation, have led consumers to reduce discretionary spending, adversely affecting sales.
- Increased Competition: The rise of e-commerce and competition from other retailers have intensified market pressures.
Comparison of Store Closures by State
| State | Number of Store Closures |
|---|---|
| California | 61 |
| Florida | 36 |
| Michigan | 33 |
| Ohio | 33 |
| Pennsylvania | 33 |
| Kansas | 3 |
Future Outlook
As part of the bankruptcy proceedings, Joann is seeking a buyer to acquire the business. The company has identified a subset of underperforming stores unlikely to be included in any potential sale.
Interim CEO Michael Prendergast expressed hope that a court-supervised sale process would maximize value and ensure the company’s future.
The closure of 500 Joann stores marks a significant shift for the fabric and crafts retailer as it attempts to navigate financial challenges and adapt to a changing retail environment.
While the decision aims to position the company for future success, it also underscores the broader difficulties faced by brick-and-mortar retailers in today’s economy.