Joann Fabrics and Crafts, a renowned craft retailer, has filed for Chapter 11 bankruptcy to reorganize its finances and regain stability. This move comes as the company faces mounting debt and shrinking revenues amidst an uncertain consumer environment.
Joann Fabrics and Crafts has been a trusted name in the craft industry for over 80 years. The company is known for its extensive selection of fabrics, sewing supplies, yarns, and other crafting materials.
With numerous brick-and-mortar stores across the United States and a robust online presence, Joann has been a go-to destination for hobbyists, sewists, quilters, and craft enthusiasts alike.
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On Monday, Joann Fabrics and Crafts made the decision to file for Chapter 11 bankruptcy. This legal process allows the company to restructure its debts and develop a plan to repay its creditors while continuing its operations. Despite the bankruptcy filing, Joann reassures its customers, vendors, landlords, and other trade creditors that there will be no disruption in services.
The company intends to keep its stores open and its website operational, ensuring business continuity for its loyal patrons.
“Customers, vendors, landlords, and other trade creditors will not see any disruption in services,” Joann said in a release. “The Company remains as focused as ever on providing customers with quality products and services that inspire their creativity.
The company encountered several challenges that have contributed to its financial struggles. In its most recent quarter, the company reported over $1 billion in debt, accompanied by declining revenues and widening net losses.
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These financial setbacks are a result of various factors, including an uncertain consumer environment and increased competition in the craft industry. Wall Street’s negative reaction to the news was reflected in a significant drop in Joann’s share prices, which plummeted by as much as 20%.
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