Joann, the craft retail giant known for its sewing and home décor products, has made the tough decision to shut down 500 of its stores across the U.S. as part of its ongoing bankruptcy process.

The company, which has been a staple in the industry for over 80 years, filed for Chapter 11 protection in January, marking its second bankruptcy filing in just two years.

Impact of Increased Online Competition

Joann’s decision to close stores comes after facing increased competition from online retailers.

The company had hoped to weather the storm during its previous bankruptcy, keeping all of its locations open despite declining sales.

However, it became clear that further closures were necessary to reduce costs and make the business more attractive to potential buyers.

The Closure Process and Store Locations

While the exact locations of the stores being shut down haven’t been detailed, court filings indicate that closures will occur across all 50 states, with California, Florida, Michigan, and New York among the hardest hit.

Joann has 800 stores currently operating, employing 19,000 people. The closures are part of the company’s broader plan to increase profitability and cut its losses, especially as it looks for a buyer.

Previous Bankruptcy and Mistakes in Strategy

This isn’t the first time Joann has faced financial challenges.

In March 2024, the company filed for bankruptcy after pandemic-related sales growth declined, leaving it with $1.2 billion in debt.

After emerging from bankruptcy, Joann continued operating its full store count without making any significant cuts to underperforming locations.

Experts believe that failing to close non-profitable stores earlier was a mistake that cost the company, as it failed to cut expensive leases and reduce operational costs.

Discounts and Liquidation Sales

Customers affected by the closures will have the opportunity to take advantage of significant discounts, with markdowns ranging from 50% to 90% off at the affected stores.

The liquidation sales offer shoppers a chance to stock up on craft supplies before these locations close for good.

Challenges of the Post-Pandemic Retail Environment

Joann is not alone in facing difficulties. As more people return to work, the surge in home crafting seen during the pandemic has significantly declined.

The company joins other major retail names, such as Bed Bath & Beyond, The Container Store, and Big Lots, which have also filed for Chapter 11 in recent months.

These companies are all grappling with the challenges posed by the post-pandemic retail environment and the rise of online shopping.

The Larger Retail Crisis

Joann’s bankruptcy filing and subsequent closures add to the growing trend of store closures across the U.S., often referred to as the “retail apocalypse.” In 2024, U.S. retailers shut down over 7,300 stores, a 60% increase from the previous year.

Joann’s closures are a part of this larger wave of store closures, which have been affecting not just craft retailers but a wide range of industries.

Looking Forward

Joann is hoping that these closures will help streamline its operations and position it for a successful sale.

While it struggles with the shift in consumer behavior, the company remains hopeful that cutting back on its physical presence will give it the financial flexibility it needs to survive in an increasingly digital marketplace.

This article was published on TDPel Media. Thanks for reading!

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