Joann to Close 500 Stores Amid Second Bankruptcy Filing

Joann to Close 500 Stores Amid Second Bankruptcy Filing \ Newslooks \ Washington DC \ Mary Sidiqi \ Evening Edition \ Joann, the struggling fabric and craft retailer, announced plans to close 500 stores—over half of its U.S. locations—as it navigates its second bankruptcy filing in a year. The company cites declining consumer demand, inventory shortages, and rising competition as key factors. A sale is in progress, with Gordon Brothers Retail Partners emerging as a potential buyer.

Joann Store Closures & Bankruptcy: Quick Looks

• Joann is closing approximately 500 stores, more than half of its nationwide locations.
• The move follows the retailer’s second Chapter 11 bankruptcy filing in less than a year.
• Inventory shortages, declining demand, and competition have contributed to the financial struggles.
• The company is seeking court approval to start the store closure process.
• Joann’s roots date back to 1943, growing into a national chain before facing financial distress.
• The closures will impact locations across multiple states, including California, Texas, Florida, and New York.
• A sale of Joann is in the works, with Gordon Brothers Retail Partners as a potential buyer.

Deep Look

Joann’s Struggles: A Second Bankruptcy & Major Downsizing

Joann, the well-known fabric and craft retailer, is closing 500 stores across the U.S. as part of its ongoing bankruptcy restructuring efforts. The move, announced on Wednesday, marks a significant downsizing of the company’s footprint, which currently includes around 800 stores across 49 states.

This decision follows Joann’s second Chapter 11 bankruptcy filing in less than a year, a reflection of the ongoing financial struggles plaguing the retailer.

A Tumultuous Year: Two Bankruptcies & Operational Challenges

Joann first filed for Chapter 11 bankruptcy in March 2024, citing declining sales and financial losses. The company successfully restructured and emerged as a private entity, but continued operational difficulties forced it to file for bankruptcy again in January 2025.

In a court filing on Wednesday, Joann emphasized that closing underperforming stores is a necessary step to facilitate a potential sale of the business.

“This was a very difficult decision to make, given the major impact we know it will have on our Team Members, our customers, and all of the communities we serve,” Joann stated. “Right-sizing our store footprint is a critical part of our efforts to ensure the best path forward.”

Why Is Joann Closing 500 Stores?

Several factors have contributed to Joann’s financial struggles:

1. Declining Consumer Demand

Joann benefited from a surge in at-home crafting during the COVID-19 pandemic, but demand plummeted as consumers shifted spending habits back to experiences and other discretionary purchases.

2. Inventory Shortages & Supply Chain Issues

Interim CEO Michael Prendergast revealed that unexpected inventory shortages severely disrupted the company’s ability to meet customer demand.

“In-stock levels eventually dropped by upwards of 10%, leading to a new phase of operational distress,” Prendergast stated in a court declaration.

This shortage reduced sales, worsened financial instability, and left the company unable to recover from previous losses.

3. Increased Competition

Joann faces growing competition from both specialty retailers and large chains:

• Hobby Lobby remains a dominant competitor in the arts and crafts sector.
• Target, Walmart, and Amazon have expanded crafting and fabric selections, drawing away customers.
• Smaller, online craft retailers have gained traction, offering personalized, competitive alternatives.

4. Macroeconomic Challenges

The broader retail landscape has been impacted by inflation, shifting consumer spending, and economic uncertainty, putting additional pressure on Joann’s finances.

Where Are Joann Stores Closing?

Joann has not fully disclosed the final list of store closures but has confirmed that locations across multiple states will be affected, including:

• California
• Texas
• Florida
• New York
• Illinois
• Pennsylvania
• Georgia
• Arizona
• Michigan
• Colorado

A detailed list of impacted stores is available on Joann’s restructuring website.

Joann’s History: From Humble Beginnings to Financial Turmoil

Founded in 1943 as a single storefront in Cleveland, Ohio, Joann grew into a household name in the fabric and crafts industry. The retailer was originally known as Jo-Ann Fabric and Craft Stores before rebranding to simply “Joann” in 2018 for its 75th anniversary.

For decades, the company thrived, but recent economic challenges and shifting consumer habits have forced it into a dramatic fight for survival.

The Future: Joann’s Sale & What Comes Next

As part of its bankruptcy plan, Joann is actively seeking a buyer. The company has a preliminary agreement with Gordon Brothers Retail Partners, known for acquiring and restructuring struggling retailers.

“We believe a sale of the business is the best path forward,” Joann stated.

If the deal is finalized, Gordon Brothers could take control of Joann’s remaining operations, potentially keeping some stores open while restructuring the brand.

How Will This Impact Employees?

Joann has not yet confirmed how many employees will be laid off due to the store closures. However, with 500 locations shutting down, the number is expected to be substantial.

The company has filed a motion seeking court approval to begin closing stores, but timing remains unclear.

What It Means for Customers

For Joann’s loyal customers, the store closures could mean fewer locations and potential liquidation sales at affected stores. Customers should check Joann’s website for updates on closures, sales, and ongoing business operations.

Final Thoughts

Joann’s decision to close 500 stores marks a major turning point for the iconic fabric and craft retailer. After filing for Chapter 11 bankruptcy twice in less than a year, the company is facing serious financial challenges that have forced it to restructure and seek a sale.

With declining demand, inventory shortages, and increased competition, Joann’s future remains uncertain. Whether Gordon Brothers Retail Partners completes the acquisition or not, the crafting industry is changing, and Joann’s next steps will determine whether it survives or fades away.

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