Joann Stores to Close Permanently After Bankruptcy Auction
Introduction
Joann, the prominent fabric and craft retailer, announced the closure of all its remaining stores after being auctioned off to a new ownership group. The company had filed for Chapter 11 bankruptcy for the second time within a year, leading to the sale of its assets.
Auction Results and Ownership Change
Retail liquidator GA Group and Joann’s term lenders emerged victorious in the auction for the struggling company. The Hudson, Ohio-based retailer confirmed that it will shut down operations at all stores after conducting going-out-of-business sales at each location.
Loss of Stores and Impact on Stakeholders
Joann had previously announced the closures of approximately 500 of its more than 800 locations across the U.S. However, the new ownership group has decided to liquidate the remaining stores as well. This decision is expected to have a significant impact on employees, customers, and communities across the nation.
Going-Out-of-Business Sales and Customer Information
Going-out-of-business sales commenced at the 500 stores that were initially slated to close on February 15th. The sales have now been extended to all Joann locations. Customers are advised that only inventory available on-site at each store will be included in the sales.
Discounts are expected to range from 10-20% on base items, with some Christmas items being discounted up to 75%. However, gift cards are not being accepted during the sales. Additionally, discounts for Girl Scouts, teachers, military, and healthcare workers are suspended. Item returns are also not being accepted at closing locations.
New Ownership Group’s Plans
GA Group, led by CEO Scott Carpenter, has a long-standing relationship with Joann. The group assisted Joann in acquiring House of Fabrics in the late 1990s and expanded the retailer’s store footprint from 2006 to 2016.
Carpenter stated that the new ownership group intends to implement a multimillion-dollar retention plan for Joann’s approximately 19,000 employees. This plan will include organizing job fairs and providing employees with time off for job interviews.
Employee and Community Support
GA Group emphasized its commitment to closing Joann stores with empathy, professionalism, and efficiency. The company will work closely with employees to assist them in their job search and transition to other opportunities.
Business Challenges and Impact on the Industry
Joann’s demise underscores the challenges that traditional brick-and-mortar retailers are facing in the wake of rising online shopping and changing consumer habits. The company had struggled to compete with larger competitors and had also been impacted by the COVID-19 pandemic.
The closure of Joann stores will leave a void in the fabric and craft industry, as the retailer had a loyal customer base and a strong brand presence. It remains to be seen how the market will adjust to this major loss and how competitors will respond.
