In a significant and somber announcement, Joann, once a staple in the fabric and crafts retail landscape, has revealed plans to shutter approximately 500 stores across the United States—over half of its current footprint. This move comes on the heels of the company’s second Chapter 11 bankruptcy filing within a year, a clear signal that the retailer is grappling with profound operational challenges and shifting consumer behaviors.
Founded in 1943 in Cleveland, Ohio, Joann has evolved from a single storefront into a recognizable brand in the crafting community. Known for its dedication to fabric and craft supplies, the company enjoyed a surge of popularity during the COVID-19 pandemic when many consumers turned to at-home projects. However, as the world has shifted back to more traditional shopping habits, Joann has struggled to maintain its momentum. With the announcement made recently, the company is taking drastic measures to navigate these turbulent waters.
The latest bankruptcy filing, initiated in January 2025, follows a previous attempt at restructuring in March 2024. In both instances, the company cited sluggish consumer demand and inventory shortages as primary contributors to its financial woes. Interim CEO Michael Prendergast noted in a court declaration that unexpected inventory challenges had led to a significant drop in stock levels—reportedly by more than 10%—which has exacerbated operational distress. “Unanticipated inventory challenges post-emergence, coupled with the prolonged impact of an excessively sluggish retail economy, put Joann back into an untenable debt position,” he explained, highlighting how these issues have created a cascading effect on the company’s ability to serve its customers.
The decision to close these underperforming locations is framed as a necessary step toward a broader strategy aimed at stabilizing the business and possibly attracting a buyer. Joann is currently exploring a sale, with a proposed “stalking horse” bid agreement in place with Gordon Brothers Retail Partners. This arrangement is intended to set a baseline for the sale process, providing a structured approach to what could be a complex transition.
The list of affected locations spans across numerous states, including Arizona, California, Florida, and Texas, but specifics on the timeline for closures and the number of employees affected remain unclear. The company has expressed understanding of the significant impact these closures will have on its team members and the communities it serves, emphasizing the difficult nature of the decision.
This predicament for Joann is not an isolated incident in the retail sector. The broader market has seen a notable slowdown in discretionary spending, as consumers become more selective in their purchasing habits. Compounding this issue is the rise in competition from both specialized craft retailers like Hobby Lobby and larger general retailers such as Target, which have expanded their offerings to include a variety of art supplies and DIY kits.
Recent studies indicate that the crafting market, while still robust, has undergone shifts in consumer engagement. According to a report by the Craft and Hobby Association, while the industry saw a boom during the pandemic, interest has since plateaued, leading to increased pressure on companies like Joann to innovate and adapt.
As Joann navigates this challenging landscape, the focus on right-sizing its store footprint reflects a critical assessment of its operational strategy. The hope is that by consolidating resources and streamlining operations, the company can emerge from this period of turmoil stronger and more focused.
In summary, Joann’s journey highlights the complexities of the retail environment, where consumer preferences are constantly evolving and competition is fierce. The company’s future hinges on its ability to adapt to these changes and address the core issues that have led to its current predicament. As it seeks to right the ship, stakeholders will be watching closely to see if Joann can reclaim its place in the hearts of crafting enthusiasts across the nation.
