In a significant retail industry shake-up, Joann, the well-known fabric and crafts retailer, will close all its locations across the United States. The company's new owners have decided to liquidate its assets.
According to USA Today, Joann is closing all its stores following a bankruptcy auction where GA Group and its term lenders emerged as the winning bidders.
Joann, a Hudson, Ohio-based company, filed for Chapter 11 bankruptcy protection for the second time within a year, citing overwhelming financial challenges. This filing triggered an auction of the company's assets. On Saturday, officials declared the bid by GA Group, a retail liquidator, along with Joann's term lenders, as the winning offer.
The U.S. Bankruptcy Court for the District of Delaware must approve the auction's result, with a formal endorsement set for a hearing on Wednesday. This pivotal decision will finalize the transfer of Joann's assets to the new owners and confirm the closure plans.
Before the final auction result, Joann had already initiated the process of winding down operations by announcing the closure of approximately 500 of its over 800 stores nationwide. The move was a preemptive step towards managing the reductions smoothly.
With all locations now scheduled for closure, the company began going-out-of-business sales last week, initially at those 500 stores previously earmarked to shut down. This sales strategy is now being expanded to include every Joann store.
Among the numerous closures, the Joann store located at 463877 State Road 200 in Yulee, Florida, stands out, as Florida alone will see the closure of 36 stores.
The GA Group, now overseeing the liquidation, is not new to Joann’s operational history. In the past, they have collaborated on various projects including acquisitions and expansions, thus familiarizing themselves with Joann’s business model and assets.
Scott Carpenter, CEO of GA Group's Retail Solutions and Wholesale & Industrial Solutions teams, emphasized the importance of handling the closures with care. He stated, "We will help Joann close these stores with empathy, professionalism, and efficiency.”
This focus on respectful and efficient closures reflects an awareness of the impact on employees and communities that have supported Joann for more than 80 years.
The new ownership group has announced a comprehensive plan to assist approximately 19,000 affected employees. The company has developed this multimillion-dollar retention plan by organizing job fairs and providing time off for job interviews, ensuring that employees receive support as they transition to new opportunities.
As part of these efforts, the company stated, "JOANN leadership, our Board, advisors, and legal partners made every possible effort to pursue a more favorable outcome that would keep the company in business. We are committed to working constructively with the winning bidder to ensure an orderly wind-down of operations that minimizes the impact on all our stakeholders."
Emphasizing the depth of their gratitude, the company added, “We deeply appreciate our dedicated team members, our customers, and communities across the nation for their unwavering support for more than 80 years.” This expression underscores a long-standing relationship with their consumer base and workforce.
Joann's liquidation sales are limited to stock already present at the closing locations. Consequently, this approach facilitates a swift and effective clearance of goods, catering directly to the local customer bases.
Meanwhile, as the final sales roll out across the remaining stores, Joann’s leadership continues to navigate the complexities of liquidating a nationwide retailer. Throughout this process, the focus remains on conducting the process with precision to mitigate impacts as much as possible.
Ultimately, the closure of Joann stores marks the end of an era for the fabric and craft retail sector in the U.S., turning a page on a brand that has served communities and craft enthusiasts for decades. As a result, as the company transitions to this final chapter, the strategies employed reflect a blend of strategic foresight and compassionate handling of its personnel and operational wind-down.
