Joann, the craft supply and fabric retailer, filed for bankruptcy on Monday as it grapples with consumer pullback following a brief pandemic boom, according to multiple reports.
The Ohio-based company filed for Chapter 11 bankruptcy protection and secured $132 million in funding aimed at reducing debts by about $505 million. In its petition, the company listed liabilities between $1 and $10 billion.
The company’s website and its nearly 830 stores nationwide will remain open and continue to operate as normal.
“This agreement is a significant step forward in addressing JOANN’s capital structure needs, and it will provide us with the financial resources and flexibility necessary to continue to deliver best-in-class product assortments and enhance the customers experience wherever they are shopping with us,” said Scott Sekella, Joann’s chief financial officer and co-lead of the Interim Office of the CEO.
The crafts chain saw a surge in demand early in the pandemic but has dealt with falling sales since lockdowns lifted and consumers began cutting back on discretionary spending, according to The Wall Street Journal and Bloomberg News. In December, Joann reported a drop in quarterly sales, with Sekella pointing to an “uncertain consumer environment.”
Following the bankruptcy process, which the company expects to complete as soon as next month, Joann will be delisted from NASDAQ and become privately owned.
“The Company remains as focused as ever on providing customers with quality products and services that inspire their creativity,” Joann said in a news release.
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