Joann Inc. has found itself in financial distress once again, filing for Chapter 11 bankruptcy protection for the second time in less than a year. The Ohio-based crafts retailer is now exploring the option of selling itself to another company in order to maximize the value of its business.
Interim CEO Michael Prendergast cited a challenging retail environment, sagging sales, and constrained inventory levels as the reasons behind the company’s decision to seek bankruptcy protection. This move comes after Joann initially filed for Chapter 11 in March 2024, becoming a private company without closing any of its 800+ locations across the United States.
“We have determined that initiating a court-supervised sale process is the best course of action to maximize the value of the business,” Prendergast stated. The company is currently seeking court approval to start a sale process, with Gordon Brothers Retail Partners LLC lined up as the “stalking horse” bidder. Gordon Brothers has expressed its intention to pursue a liquidation of Joann and conduct going out-of-business sales at all store locations.
Despite the potential sale, Joann is actively soliciting alternate bids and has received inquiries from parties interested in continuing to operate the stores and online businesses. If qualified bids are submitted during the sale process, the company plans to hold an auction, with the stalking horse bid setting the minimum price.
In the meantime, Joann’s stores will remain open, and the online store will continue to operate as usual. Employees will still receive their pay and benefits during this uncertain time for the company. Joann is hopeful that this process will lead to a path that allows it to continue operating as a going concern.
