Joann Inc. announced court approval to exit bankruptcy proceedings just over a month after it initially filed for Chapter 11 bankruptcy.
The financial restructuring agreement will allow all 815 retail locations to stay open and Joann may also proceed to employ greater than 18,000 employees. Joann will exit the method as a non-public company, owned by the creditors who agreed to eliminate $505 million in debt, about half of what the craft retailer owed.
Joann is No. 301 within the Top 1000, Digital Commerce 360’s rating of North America’s leading retailers by online sales. Digital Commerce 360 categorizes Joann as a Toys & Hobbies retailer.
Joann’s bankruptcy filing
The retailer first filed for bankruptcy on March 18, citing struggles to keep up sales after consumers in the reduction of on hobby spending.
It listed $2.44 billion in total debts and $2.26 billion in total assets within the filing.
On the time, Joann had entered right into a Transaction Support Agreement (TSA) with nearly all of its financial stakeholders. It received $132 million in recent financing in March, and it reported plans to scale back its debt by $505 million due to the brand new funding and agreements with lenders and vendors.
The Prepackaged Joint Plan of Reorganization approved by the U.S. Bankruptcy Court for the District of Delaware closely reflected the initial deal Joann made with creditors.
“I appreciate that this degree of consensus, especially in a case with stakes this high, isn’t forged by accident, but is the results of good and exertions,” U.S. bankruptcy judge Craig Goldblatt said at a hearing on the agreement.
The craft retailer hired Alvarez & Marsal North America, LLC as restructuring advisor. Latham & Watkins LLP served as Joann’s legal advisor, it said.
What happens next for Joann after bankruptcy
“We’re pleased to have reached this significant milestone lower than 40 days after initiating our court-supervised process,” chief customer officer and interim co-CEO Chris DiTulio said in a written statement. “We couldn’t have reached this point without the unwavering dedication of our Team Members, the continued support of our industry partners and landlords, and the tremendous loyalty and enthusiasm of our customers. JOANN will move forward with a strengthened financial foundation, allowing us to speculate in customer experience enhancements, our best-in-class product assortments, and our greater than 18,000 Team Members nationwide.”
The opposite co-interim CEO, financial officer Scott Sekella echoed the sentiment.
“With a strengthened balance sheet and improved liquidity, we’re higher positioned to work collaboratively with our vendors, business partners and landlords, and ultimately to encourage the creativity in our customers that helps them find their glad place,” he said.
Joann has not had a everlasting CEO in nearly a yr. Former CEO Wade Miquelon retired in May 2023. Miquelon called fiscal 2023 a “difficult yr” before his exit. The retailer’s board of directors has been trying to find a brand new CEO since then.
Despite Joann’s debt, the business is in a promising place, in response to the bankruptcy filing. 96% of stores have positive money flow. Moreover, online sales accounted for 13% of revenue in fiscal 2024, the filing said. Stores and online sales will proceed to operate with no changes, Joann said.
Do you rank in our database?
Submit your data with this quick survey and we’ll see where you slot in our next rating update.
Join
Stay on top of the newest developments within the ecommerce industry. Join for a complimentary subscription to Digital Commerce 360 Retail News. Follow us on LinkedIn, Twitter, Facebook and YouTube. Be the primary to know when Digital Commerce 360 publishes news content.
