CALIFORNIA –
Joann announced, January 15, that it filed for Chapter 11 bankruptcy in a Delaware court to help sell its business and get the best value.
There are over 75 Joann stores in California with more than 800 stores across the U.S. offering sewing, fabrics, arts and crafts products.
This is the company’s second bankruptcy filing. Joann said after the first Chapter 11 restructuring in 2024, it continued to experience significant and lasting challenges in the retail environment.
Joann’s interim CEO Michael Prendergast said the tough times in retail, along with financial struggles, and low inventory forced the company to take this step.
“After carefully reviewing all available strategic paths, we have determined that initiating a court-supervised sale process is the best course of action to maximize the value of the business,” said Prendergast.
According to the news release, Joann stores and Joann.com are open and continue to serve customers. Team members are continuing to receive pay and benefits.
Joann says buyer intends to close all stores
The court documents show that Joann’s liabilities range from $1 billion to $10 billion.
The company is asking the court to approve the sale of most of its assets. Gordon Brothers Retail Partners, LLC has been chosen as the “stalking horse” bidder, setting a baseline offer to attract other potential buyers.
Joann says Gordon Brothers intends to shut down the stores and sell everything in going-out-of-business sales.
Joann says it is looking for other offers and has heard from parties who might want to keep the stores and online business running.
Gordon Brothers says 200 Big Lots stores will remain open
Gordon Brothers recently announced the purchase of Big Lots after the company announced it would be closing all locations and starting going-out-of-business sales.
The purchasing terms include preserving the brand with at least 200 stores that will operate under the Big Lots name and retain the employees needed for continued operations.
In a stunning turn of events, one of California’s most popular craft store chains, with over 75 locations across the state, has filed for bankruptcy. This move comes as the company struggles with mounting debts, shifting consumer habits, and the broader challenges facing retail businesses in an increasingly digital world. The news has left loyal customers, employees, and industry watchers questioning what the future holds for the beloved retailer.
A Long-Standing Icon in California
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For decades, the craft store chain has been a staple in communities throughout California. Known for its extensive selection of arts and crafts supplies, home décor, seasonal decorations, and DIY project materials, the store attracted a wide range of customers, from hobbyists to professional crafters. Its numerous locations, often nestled in suburban shopping centers, were easy to access for those looking to spark their creativity.
The store has also hosted crafting workshops, DIY project demonstrations, and community events, solidifying its position as not just a retailer but a hub for the creative community. However, despite its long-standing presence, the company has struggled to keep up with the rapid changes in consumer behavior and the retail landscape.
Rising Debt and Financial Strain
The bankruptcy filing, which was submitted earlier this week, cites mounting financial pressures as a key reason for the decision. In its official statement, the company revealed that it has been grappling with significant debt, exacerbated by the lingering effects of the COVID-19 pandemic and increased competition from both online retailers and discount chains.
Like many physical stores, the craft store chain saw a sharp decline in foot traffic during the pandemic, as lockdowns and social distancing measures kept customers away. While the craft industry as a whole experienced a surge in popularity during lockdowns—thanks in part to people turning to hobbies and DIY projects during their time at home—the company was unable to fully capitalize on this trend. With many customers opting to shop online, the company’s physical locations became less of a draw, leading to reduced sales and profitability.
The increasing popularity of e-commerce giants like Amazon and specialized craft suppliers also impacted the store’s bottom line. Although the company launched an online shopping platform, it struggled to compete with the convenience and competitive pricing of larger online retailers.
Impact on Employees and Customers
The bankruptcy filing has already had a significant impact on employees, with several store closures expected in the coming months. While the company has pledged to retain some locations and attempt a restructuring, many workers are uncertain about their future with the company.
One employee, who requested to remain anonymous, spoke about the anxiety surrounding the bankruptcy announcement. “It’s been tough. We’ve had some warning signs, but it’s still hard to hear the news. I’ve worked here for years and built strong relationships with customers. It feels like the end of an era,” they said.
Loyal customers are equally disheartened by the news. Many have fond memories of shopping at the store, whether for seasonal crafts, home décor items, or their favorite supplies for hobbies. For those who relied on the convenience of nearby locations, the potential closures are especially painful.
“I’ve been coming to this store for over 10 years. It’s sad to see it go downhill,” said Jennifer, a regular shopper from Los Angeles. “I always found what I needed for my DIY projects here, and I loved their holiday decorations. I’ll miss that personal touch you don’t get from ordering online.”
The Future of the Chain
While the bankruptcy filing marks a significant turning point for the company, it’s not necessarily the end. Filing for bankruptcy allows the retailer to restructure its debt and attempt to reorganize its operations, which may include scaling down its physical footprint and focusing more heavily on its online platform. In fact, many businesses that have filed for bankruptcy have used the process to emerge stronger by shedding non-profitable locations and refocusing on their core offerings.
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However, even with restructuring, the road to recovery could be long. The retail landscape has fundamentally shifted in recent years, and the trend toward e-commerce is unlikely to reverse anytime soon. The craft store chain may find it difficult to regain the same level of market share it once had, especially as more consumers opt for convenience and competitive pricing.
Industry experts suggest that the chain may need to rethink its strategy entirely. This could include redefining its brand, embracing more sustainable and niche products, or focusing on crafting kits and online tutorials that can appeal to the growing number of consumers looking for interactive and virtual shopping experiences.
A Shift in the Craft Retail Landscape
The bankruptcy filing of this popular craft store chain is yet another example of the pressures facing traditional retail businesses in the modern age. While many industries are seeing a shift toward online shopping, the craft sector has been uniquely impacted, as customers turn to the ease of digital purchases for their DIY and hobby needs.
For consumers, it may mean turning to online craft stores, niche suppliers, or even local independent shops to fill the void left by the chain’s potential closures. For employees, it signals an uncertain future in an industry that is rapidly evolving.
As the company moves through the bankruptcy process, all eyes will be on how it chooses to navigate these turbulent waters and whether it can reinvent itself for a new era of retail. In the meantime, the future of California’s beloved craft store remains uncertain, leaving both loyal customers and employees hoping for a brighter tomorrow.
