NEW YORK (AP) — Joann, a company that sells fabric and crafts, has applied for Chapter 11 bankruptcy protection, as people continue to spend less money on non-essential items.
According to a statement on Monday, the Hudson, Ohio-based company said it hopes to come out of bankruptcy as soon as the end of next month. After this process, Joann will probably be owned by specific lenders and industry parties, rather than being publicly traded on stock exchanges.
During the bankruptcy process, Joann's more than 800 stores and website will keep operating as usual. The company assured that vendors, landlords, and other trade creditors will not experience payment disruptions due to an agreement with most of its shareholders for financial support.
In addition to filing for bankruptcy in U.S. Bankruptcy Court on Monday, Joann mentioned that it has secured around $132 million in new funding and anticipates reducing its funded debt by about $505 million.
Scott Sekella, Joann’s Chief Financial Officer and co-lead of the CEO’s interim office, described the transaction support agreement as a “significant step forward” in addressing the company’s financial needs.
In Monday’s Chapter 11 petition filed in Delaware, Joann listed total debts of over $2.44 billion and total assets of about $2.26 billion, citing data from October 2023.
Established in 1943, the company previously became private in 2011 when equity firm Leonard Green & Partners bought it for about $1.6 billion.
Ten years later, Joann, which is mainly owned by Leonard Green & Partners, became a publicly traded company through an initial public offering at $12 a share.
