Crafts and fabrics retailer Joann filed for Chapter 11 bankruptcy protection while seeking to restructure $1 billion in debt and remain open.
Joann intends to use bankruptcy to cut its debt in half through funding and negotiate with creditors.
“Customers, vendors, landlords, and other trade creditors will not see any disruption in services,” the company stated. “The Company remains as focused as ever on providing customers with quality products and services that inspire their creativity.”
It aims to keep operating its 850 stores and website without disruption to customers, vendors or employees.
While the pandemic boosted sales, high inflation has since cut into consumer spending.
Joann went public in 2021 but will now go private again as part of the bankruptcy process.
It hopes restructuring can help it compete against stores like Hobby Lobby offering lower prices.
The company sees bankruptcy as providing resources to enhance the customer experience and ensure its long-term survival in the industry.
“This agreement is a significant step forward in addressing Joann’s capital structure needs, and it will provide us with the financial resources and flexibility necessary to continue to deliver best-in-class product assortments and enhance the customer experience wherever they are shopping with us,” Chief Financial Officer Scott Sekella said.
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