Joann, a leading craft retailer with a history spanning more than 80 years, revealed on Wednesday that it plans to close 500 stores across the United States as part of its ongoing bankruptcy process. This decision comes after the company filed for Chapter 11 protection in January, marking its second bankruptcy filing in just two years.
The move to shut down a significant number of locations is part of a larger restructuring effort as Joann works to navigate financial challenges exacerbated by shifting market conditions. The company, once a staple in the crafting community, has seen its revenue decline in recent years, driven in part by increasing competition from online retailers and changing consumer preferences.
Founded in 1943, Joann has long been a dominant force in the craft supply sector, offering a wide range of products for hobbies, sewing, home décor, and DIY projects. Its brick-and-mortar stores were once a go-to destination for crafters of all kinds. However, the landscape of retail has dramatically changed with the rise of e-commerce giants like Amazon and niche online stores that cater specifically to craft enthusiasts.
The surge in online shopping, accelerated by the COVID-19 pandemic, has left many traditional retailers, including Joann, struggling to compete. Consumers increasingly prefer the convenience of browsing and purchasing supplies from home, rather than making trips to physical stores. This shift has had a profound impact on Joann’s ability to maintain its profitability, prompting the company to seek bankruptcy protection in an attempt to reorganize and reduce its debt load.
The bankruptcy filing in January came just two years after the company’s first Chapter 11 filing, a clear indication of the ongoing financial difficulties it has faced. The company’s second bankruptcy filing has been attributed to several factors, including rising operational costs, debt obligations, and intensified competition from both physical and online competitors. In addition, Joann’s efforts to modernize and streamline its operations have been slower than needed to keep up with the evolving retail environment.
The planned store closures are part of a broader strategy to reshape the company’s financial future. Joann intends to focus on enhancing its digital presence and expanding its e-commerce operations to better serve customers who prefer to shop online. The closures will primarily affect locations that have struggled to perform financially, while the company plans to invest in optimizing its remaining stores and enhancing its online platform.
While the closures will result in significant job losses for employees at the affected stores, Joann has assured that it will offer support and severance packages for those impacted. The company has also indicated that it will continue to focus on its core strengths, including offering an extensive selection of craft supplies and fostering a strong community of DIY enthusiasts.
As Joann navigates its bankruptcy proceedings and attempts to reinvent itself in the face of a rapidly changing retail landscape, it remains to be seen how these changes will affect its long-term viability. The company’s success in executing its restructuring plan will likely depend on its ability to adapt to shifting consumer behavior and continue to provide value to its customers in an increasingly competitive market.
