Fabric-Crafts Chain Joann Files for Bankruptcy

HUDSON, Ohio – Sewing and fabric chain Joann announced that it has commenced voluntary Chapter 11 proceedings in the U.S. Bankruptcy Court for the District of Delaware to facilitate a sale process to maximize the value of its business.

Joann stores and Joann.com are open in the ordinary course and continue to serve customers. Team members are continuing to receive pay and benefits while the company seeks court approval to commence a process for the sale of substantially all of its assets under Section 363 of the U.S. Bankruptcy Code pursuant to which Gordon Brothers Retail Partners, LLC would serve as the “stalking horse” bidder.

The proposed transaction is subject to higher and better offers, among other conditions. The company continues to actively solicit alternate bids. If other qualified bids are submitted during the court-supervised sale processes, the company plans to conduct an auction or auctions, with the stalking horse bid setting the floor for the auction processes.

“Since becoming a private company in April, the board and management team have continued to execute on top- and bottom-line initiatives to manage costs and drive value,” said Michael Prendergast, Interim Chief Executive Officer of Joann. “However, 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.

“After carefully reviewing all available strategic paths, we have determined that initiating a court-supervised sale process is the best course of action to maximize the value of the business,” he added. “We hope that this process enables us to find a path that would allow Joann to continue operating as a going concern.”

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.

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Brad Kadrich
Brad Kadrich is an award-winning journalist with more than 30 years’ experience, most recently as an editor/content coach for the Observer & Eccentric Newspapers and Hometown Life, managing 10 newspapers in Wayne and Oakland counties. He was born in Detroit, grew up in Warren and spent 15 years in the U.S. Air Force, primarily producing base newspapers and running media and community relations operations.