Henry Baker 
Fabric and craft retailer, JOANN was founded in Cleveland 81 years ago and is currently headquartered in Hudson, Ohio
In its recent press release on March 18, it has initiated voluntary prepackaged Chapter 11 cases in the U.S. Bankruptcy Court for the District of Delaware.
They have highlighted their plan to reduce the funded debt of approximately $550 million on their balance sheet and the Company has received commitments for approximately $132 million. They have listed liabilities of around $1 billion to $10 billion.
JOANN had a roller-coaster ride in recent times. They experienced exponential growth for a short COVID period. During the pandemic time, their customer increased manyfold as more people were spending money on arts and crafts. However, that adventure was short-lived, and people started spending way less in these categories, impacting JOANN’s business.
JOANN’s journey started as a favorite fabric destination and then pivoted to a one-stop solution for sewing, knitting, crocheting, crafting & decorating your home for every season.
It was born in 1943 from a single storefront in Cleveland, Ohio, and now, operates approximately 850 stores in 49 states. JOANN was originally named Jo-Ann Fabric and Craft Stores, and it was rebranded as “JOANN” on its 75th anniversary. It is helping every customer to find their creative happy place, JOANN serves as a single point of contact for all of the supplies, guidance, and inspiration required to achieve any project or passion.
All the stores and websites will operate as usual as per the press release.
After the end of this process, JOANN will become a private company owned by some lenders and industry parties, and its shares will no longer be listed on Nasdaq or any other national stock exchange.
The Hudson, Ohio-based chain share will be delisted from NASDAQ or any other stock exchange after the bankruptcy proceedings and will be privately owned by “certain of its lenders and industry parties,” according to a company statement on Monday.
JOANN Shares had dropped to an all-time low of about 18 cents on March 18.
As per a statement from JOANN’s Chief Financial Officer, Scott Sekella, “This agreement is a significant step forward in addressing JOANN’s capital structure needs, and it will provide us with the financial resources and flexibility necessary to continue to deliver best-in-class product assortments and enhance the customer experience wherever they are shopping with us, including all of our stores across the United States, 95% of which have positive cash flow. We remain focussed on ensuring continuous operations as usual to continue to best serve our millions of customers nationwide, and also committed to our partners, Team Members, and all other stakeholders”.
“Over the past several months, JOANN has made meaningful business improvements through the execution of our Focus, Simplify, and Grow cost reduction initiative,” said Chris DiTullio, Chief Customer Officer and co-lead of the Interim Office of the CEO.
We have to wait and see how this step will help the company back on track.