Joann Fabric and Craft Store, one of the nation’s largest sewing and fabric retail stores, has announced via financial restructuring documentation found on its website, that the chain store has filed a court motion seeking the authority to begin the closure of more than 500 stores across the country on Wednesday.
The closures have been announced as part of the company’s ongoing Chapter 11 bankruptcy process.
“After carefully reviewing all available strategic paths to address our ongoing industry, economic and financial challenges, Joann and its financial stakeholders determined that initiating a court-supervised sale process is the best course of action to maximize the value of the business,” the company stated in documentation provided on its website.
This announcement comes after the company revealed in mid-January that it had begun voluntary Chapter 11 proceedings in the U.S. Bankruptcy Court for the District of Delaware.
“The last several years have presented significant and lasting challenges in the retail environment, which, coupled with our current financial position and constrained inventory levels, forced us to take this step,” said Michael Prendergast, the company’s interim chief executive officer in a January 15 press release.
The Owensboro Joann location at 5241 Frederica St. has been identified through documentation as one of the stores mentioned in the list of closures.
“Through the filing of customary motions with the Court, the Company intends to uphold its commitments to customers, Team Members and partners, including continued payment of employee wages and benefits,” the press release mentioned.
Prendergast also stated, “On behalf of the Board and leadership, I want to thank the thousands of Joann Team Members across the nation for their dedication to our customers and mission, especially in light of everything our company has gone through in recent years.”
Kirkland & Ellis is currently acting as legal counsel for the company during the bankruptcy proceedings.
Before the closure announcements, Joann Fabric had more than 800 locations across 49 states.
The announcement didn’t mention a timeline for the expected closures.
The Messenger-Inquirer reached out to the Frederica Street location for comment but was unable to reach a Team Member.
More information about the company’s restructuring can be found at joannrestructuring.com.