Joann Fabrics, the fabric and craft retailer, has made a tragic announcement to all its customers, as it plans to close more than half of its stores located in the United States over the next few months.
Why will Joann close its stores?
The retailer filed for bankruptcy for the first time in March 2024, after securing approximately $132 million in new funding to cover its $1 billion debt. This was followed by the closure of several stores before the company refiled for Chapter 11 in January 2025 to facilitate a sales process aimed at maximizing the value of the business.
“Right-sizing the footprint of our stores is a key part of our efforts to ensure the best path forward for Joann,” a company spokesperson stated in a press release.
Which stores will Joann close?
The company has confirmed that it plans to close 500 of its approximately 850 stores nationwide. The locations are spread across more than 40 states, with the following states having the highest number of closures:
- California
- Florida
- Illinois
- Michigan
“It was a very difficult decision to make, given the significant impact we know it will have on our team members, our customers, and all the communities we serve,” reads the statement.
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According to the company, the number of store closures may increase in the future, although it will be determined through a careful analysis of store performance and strategic alignment as to which locations should continue to operate.
When will Joann’s stores close?
So far, the company has not revealed the exact date of the closures but indicated that it would like to begin shutting down stores immediately.
Who founded Joann Fabrics?
In 1943, German immigrants Hilda and Berthold Reich, Sigmund and Mathilda Rohrbach, and Justin and Alma Zimmerman opened the Cleveland Fabric Shop in Cleveland, Ohio. After expanding, in 1963, the store adopted the name Jo-Ann Fabrics, a combination of the names of the daughters of both families: Joan and Jacqueline Ann.
In 1969, Jo-Ann Fabrics became a public company and started trading on the U.S. Stock Exchange under the name Fabri-Centers of America, Inc. In 1994, the company made its first acquisition by purchasing Cloth World.
In 1998, Fabri-Centers bought House of Fabrics, which previously operated under the names Fabricland, Fabric King, and So-Fro Fabrics. By September of that year, the company changed its name to Jo-Ann Stores Inc., and all of its stores adopted the Jo-Ann Fabrics brand.
What is Chapter 11 of the U.S. Bankruptcy Code?
Chapter 11, commonly known as the “reorganization chapter,” allows businesses, partnerships, or individuals to restructure their assets and liabilities appropriately without having to sell off all their assets.
Who can seek protection under Chapter 11?
U.S. law allows any company or individual with a domicile, business establishment, or assets in the country to request judicial supervision to restructure their finances and operations under the provisions of Chapter 11.
There is no minimum or maximum value for the assets of a foreign company in the U.S. to be eligible for Chapter 11 protection under U.S. Bankruptcy Law. In certain cases, deposits held by the legal firm managing the process in the U.S. may be considered assets, making the debtor eligible to seek Chapter 11 protection.
Which U.S. stores could file for bankruptcy in 2025?
Some of the retail chains that could face bankruptcy this year include the following:
- Beyond
- Everlane
- Glossier
- Backcountry
- Madison Reed
- CVS
- Rite Aid
- Advance Auto Parts
- 7-Eleven
- Foot Locker
