Joann Inc. could be in trouble again.
The yarn and fabrics retailer is believed to be struggling again with liquidity pressures. Joann is part of a group of retailers over the last few months—Big Lots, Party City, and The Container Store—that have hit hard times as consumers shift how they spend. Joann and Big Lots are nameplates that have circulated on the radar of credit analysts as far back as 2023 as possible bankruptcy candidates. And many of the retailers that have struggled since the COVID-19 pandemic have been in the distressed home sector.
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Joann’s financial struggles resulted in a Chapter 11 filing in March 2024 due to spending cutbacks by consumers and amid higher operating costs. The retailer cut a pre-packaged deal with its lenders and was able to exit its tour of bankruptcy proceedings one month later. The deal with creditors allowed it to keep open 815 stores, with no closures needed, and over 18,000 staff members employed. And it also allowed for vendors to be paid in full.
A Bloomberg story on Monday said Joann’s is in talks with advisors on ways to bolster its balance sheet. A separate story from November said Joann’s was seeking rebates and discounts from vendors.
Formerly known as Joann’s Fabrics, the 80-year-old crafts retailer dropped “Fabrics” from its name in 2018. At the time, its corporate name was Jo-Ann Stores Inc. It currently has more than 800 store locations across 49 states and an e-commerce operation, according to the retailer’s website.
A spokeswoman for Joann’s did not respond to a request for comment.
Joann’s ability to retain all store locations was in contrast to the trend in 2024, which saw bankruptcy filings as a reason for retail store closings last year.
Big Lots operated 870 store locations when it filed its Chapter 11 petition in September. Through a deal with Gordon Brothers Retail Partners LLC, between 200 to 400 stores and two distribution centers will be transferred to Variety Wholesalers Inc., which will keep the stores in operation under the Big Lots banner.
Party City filed its first bankruptcy petition in January 2023, and exited Chapter 11 nine months later. At the time of the filing, it operated over 800 store locations. The struggling 40-year-old chain decided last month to wind-down operations, a decision that would see 700 store locations go dark.
The Container Store Group (TCS) on Dec. 22 filed its Chapter 11 petition. Because the filing was a “prepackaged bankruptcy,” meaning it has an agreement in place with the support of lenders, it would appear that all 104 store locations will remain open. The home storage retailer had an agreement with Bed Bath & Beyond parent Beyond Inc. where Beyond was to invest $40 million in the specialty retailer, but that fell through when TCS failed to meet certain financial conditions.