Fabric and craft retailer Joann is set to shut down more than half of its stores nationwide as it navigates its second Chapter 11 bankruptcy within a year.

The company plans to close around 500 of its 800 locations across 49 states, according to the Associated Press. These closures, targeting underperforming stores, require judicial approval before moving forward.

“Right-sizing our store footprint is a critical part of our efforts to ensure the best path forward,” Joann stated to the AP.

Joann initially filed for bankruptcy in March 2023 and emerged as a private company six weeks later with its debt reduced by half. However, financial struggles persisted.

In January, the company voluntarily reentered bankruptcy proceedings to seek a buyer and address its debts, which exceed $450 million.

Like other craft retailers, Joann saw a surge in business during the pandemic as consumers turned to at-home hobbies. However, rising inflation has since led many shoppers to cut back on discretionary spending, contributing to the company’s financial difficulties.

In a court declaration, interim CEO Michael Prendergast cited unexpected inventory challenges and a sluggish retail economy as key factors in Joann’s mounting debt.

The company’s struggles mirror a broader trend in retail. By November 2024, approximately 7,100 store closures had been announced across the U.S., surpassing the total for 2023, according to CoreSight data.

Other companies have faced similar setbacks. Party City, which filed for bankruptcy in December, has already shed more than 250 store leases. Meanwhile, Denny’s—though not in bankruptcy—is reassessing its footprint, with plans to close up to 90 locations in 2025 after shutting 88 last year.

Source:  Bisnow