The company's more than 800 stores, and its 18,000 employees nationwide, will be preserved after the company filed for Chapter 11 bankruptcy protection in March.
CLEVELAND — The Hudson-based parent company of fabric and craft retail chain JOANN is expected to emerge from bankruptcy as a private company in the coming days after a U.S. bankruptcy court approved its reorganization plan.
The company's more than 800 stores, and its 18,000 employees nationwide, will be preserved as JOANN expects to complete its financial restructuring. The reorganization plan was approved Thursday by the U.S. Bankruptcy Court for the District of Delaware.
"We are pleased to have reached this significant milestone less than 40 days after initiating our court-supervised process," said Chris DiTulio, the company's chief customer officer and co-lead of the interim office of the CEO.
JOANNfiled for Chapter 11 bankruptcy protection on March 18 and was expected to change hands to private owners rather than exist as a publicly traded company as it has since March of 2021. On Thursday, JOANN confirmed it will be a "private company owned by certain of the Company's financial stakeholders and industry parties."
"We are grateful to our financial and industry stakeholders, whose support enabled us to continue operating smoothly and move through this process on an expedited basis," JOANN CFO and co-interim CEO Scott Sekella said in a news release Thursday. "Their investment not only provides us with additional financial resources, but also reflects their confidence in our Team Members and in our business to seize on the opportunities ahead."
According to the Associated Press, JOANN told the court in March that the company received $132 million in new financing and expected to reduce its funded debt by about $505 million.
"With a strengthened balance sheet and improved liquidity, we are better positioned to work collaboratively with our vendors, business partners and landlords, and ultimately to inspire the creativity in our customers that helps them find their happy place," Sekella said in the release.
JOANN previously went private in 2011 — when it was purchased by Leonard Green & Partners for about $1.6 billion. A decade later the retail chain, still majority owned by the equity firm, returned to the public market with an initial public offering at $12 a share.
JOANN Inc.'s bankruptcy filing came amid both a slowdown in discretionary spending overall and during a time consumers are taking a step back from at-home crafts, at least relative to a boom seen at the start of the COVID-19 pandemic.
The company was born back in 1943, with a single storefront in Cleveland, and later grew into a national chain. Formerly known as Jo-Ann Fabric and Craft Stores, the company rebranded itself with the shortened “JOANN” name for its 75th anniversary.
The Associated Press contributed to this report.
