Joann Inc., the entity operating popular fabric and sewing stores under the brand Joann, has made a public announcement about filing for Chapter 11 bankruptcy. The move was initiated due to continuous down sliding sales performance in the past few years. With this development, Joann’s stock will face delisting from the Nasdaq.
The company, established in 1943 in Cleveland, has grown to own 829 stores spread across 49 states. It comes as a relief for customers and employees that the bankruptcy does not immediately warrant closures of Joann outlets.
Stating from the company’s press release, their impending financial restructuring, which comes under the transaction support agreement, won’t disrupt usual operations. It has been reassured that all Joann stores as well as the company’s online platform will continue to function undisturbed and the customers, vendors, landlords, and other trade creditors won’t experience any service disruptions.
Scott Sekella, CFO at Joann, further reinforced that 95% of the company’s store locations are still cash flow positive. He also asserted that the company is steadfast in its commitment to “carry on business as usual” amid the court supervised restructuring process.
When queried about the potential closure of stores, Joann directed inquirers to its FAQ page. The page states, “Any transformations in the store fleet, including closures, remodels, and new introductions, are a part of our standard operational procedure.”
The bankruptcy proceedings and the restructuring activities will lead to Joann transitioning to a privately held enterprise. Presently, Joann’s stock is publicly traded on the Nasdaq under the ticker symbol ‘JOAN’. With the bankruptcy news breaking, JOAN shares saw a rise of 23% in premarket trading at $0.2836 per share. Joann’s stock became public in March 2021 and by May 2021 end, it was trading close to $17 per share.
Joann anticipates wrapping up the Chapter 11 bankruptcy proceedings by the end of April. The company’s response has been added to the story.
