Joann’s Bankruptcy: What’s Happening to 500 Stores?
In a tough move that reflects the changing retail landscape, Joann, the craft retailer known for its wide selection of arts and crafts, is closing 500 stores across the United States.
The announcement was made on February 12, 2025, as part of its ongoing bankruptcy process.
This marks the second time in two years that Joann has filed for bankruptcy, signaling deep struggles for the 80-year-old company.
Why Are These Closures Happening?
Joann’s recent bankruptcy filing, which took place in January 2025, was due to mounting financial pressures.
Faced with fierce competition from online giants like Amazon, Joann decided to file for Chapter 11 protection to restructure its business.
The closures are part of its strategy to cut costs, improve profitability, and make the company more appealing to potential buyers.
According to a spokesperson from Joann, deciding to close stores was a difficult choice, especially considering the impact on employees, customers, and the communities they serve.
The company, which has 800 stores across 49 states and employs around 19,000 people, hopes the move will help it find a buyer who can take the business forward.
The Impact on Communities and Employees
The company did not disclose which specific stores would be closing, but court documents reveal that all 50 states will be affected. Some states, such as California, Florida, Indiana, Michigan, New York, Pennsylvania, and Washington, will see more closures than others. Joann has emphasized that each store’s future was carefully analyzed based on performance and strategic importance to the company. This will help them continue to operate stores that have the best chance of success moving forward.
What Happened in the Previous Bankruptcy?
This is not Joann’s first brush with bankruptcy. In March 2024, after pandemic-driven sales boomed, Joann filed for Chapter 11 protection.
Despite this, the company opted to keep all of its 815 stores open, a decision that many experts considered a mistake.
By not closing underperforming stores, Joann missed an opportunity to reduce costs and improve its finances.
Inventory issues, including frequent out-of-stock situations and gaps in product assortments, further weakened the company’s position. Customers began to notice these shortcomings, contributing to a decline in sales.
During its bankruptcy proceedings, Joann also shut six stores in locations such as Burlington, Iowa, and Owings Mills, Maryland, but the larger closures planned for this year are aimed at reducing the company’s overall losses.
The Bigger Picture of Retail Challenges
Joann isn’t the only retailer feeling the squeeze.
Over the past year, several well-known chains have struggled with the ongoing shift toward online shopping.
Similar to Joann, companies like Bed Bath & Beyond, Christmas Tree Shops, and Soft Surroundings filed for Chapter 11 bankruptcy protection in 2024. Experts note that retailers often file for bankruptcy as a way to reorganize and reduce their physical footprint, which can help balance their books.
The challenges Joann faces are part of a larger trend in the retail world.
Since the pandemic, more and more consumers have shifted to online shopping, leaving brick-and-mortar stores in the dust.
Joann, in particular, has suffered as demand for home crafting has dropped, with fewer people working from home or engaging in DIY projects.
A Ripple Effect on Other Retailers
Joann’s store closures add to the growing list of retailers grappling with declining sales.
For example, The Container Store, which also benefited from pandemic-era trends, filed for bankruptcy in December 2024. It remains to be seen what will happen to its physical locations.
Similarly, Big Lots, which filed for bankruptcy in September 2024, initially announced the closure of all its stores.
However, after finding an investor, the company plans to keep between 200 and 400 of its locations open.
Even Party City, a US retail staple for decades, announced plans to shut down all 850 of its stores in late 2024.
As Joann moves forward with its restructuring efforts, the closures serve as a reminder of how tough the retail sector has become, with many companies struggling to adapt to changing consumer habits.
What’s Next for Joann?
With the closures now underway, Joann is hoping to emerge from bankruptcy stronger and ready for a potential sale.
The liquidation sales at the affected locations will offer steep discounts, ranging from 50 to 90 percent off, giving shoppers a chance to grab a bargain as the company works through this challenging chapter in its history.
As for the future, only time will tell if Joann can turn things around and reclaim its position in the competitive retail market.
This article was published on TDPel Media. Thanks for reading!
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