A beloved craft store is shutting its doors for good. After decades of serving DIY enthusiasts, the well-known retailer is preparing to liquidate all remaining locations. The decision follows a major financial shake-up that sealed its fate.
Joann Fabrics is shutting down all locations following an auction that placed the struggling retailer under new ownership. The fabric and craft chain, which filed for Chapter 11 bankruptcy for the second time in a year, had its remaining assets auctioned off.
Retail liquidator GA Group and Joann’s term lenders placed the winning bid for the struggling business during an auction on Saturday, February 22. According to federal court records, the results of the sale are expected to be approved on Wednesday, March 5 in the U.S. Bankruptcy Court for the District of Delaware.
In collaboration with its new owners, the Hudson, Ohio-based company confirmed that all locations would shut down following storewide liquidation sales.
In its restructuring website, the company stated that it was working with the winning bidder to ensure a structured closure that would minimize the impact on employees, vendors, and customers. Going-out-of-business sales have already begun at some locations and will continue at all stores.
The company leadership stated that they had exhausted all efforts to find a more favorable solution that would allow Joann to remain in business. However, no viable alternative emerged.
The closure marks the end of an era for the longtime fabric and craft retailer, which has served customers for more than 80 years. The company has not yet announced a final timeline for store closures.
Scott Carpenter, CEO of GA Group’s Retail Solutions and Wholesale & Industrial Solutions, said the company has a long-standing relationship with Joann. He noted that GA Group previously helped the retailer acquire its competitor, House of Fabrics in the late 1990s and played a role in expanding its store footprint between 2006 and 2016.
As Joann prepares to shut down, Carpenter stated that the new ownership group will implement a multimillion-dollar retention plan for its approximately 19,000 employees.
The plan includes organizing job fairs and allowing workers time off to interview for new positions. He added that GA Group aims to handle store closures with empathy, professionalism, and efficiency.
According to the company’s FAQ page, some sales will begin immediately, and store closure dates will be announced on Joann’s website and app. Customers can use gift cards through Feb. 28, while discounts on fabric, sewing supplies, and home decor are already available online.
Joann has not yet provided a timeline for when all locations will officially close, but previous statements suggest the process could take several weeks.
The retailer has faced ongoing financial struggles, with Creditsafe data showing delays in supplier payments. At the start of last year, about 30% of Joann’s outstanding bills were overdue, and by April 2024, more than 40% were past due by up to 30 days.
The fabric and craft retailer previously announced that it was closing hundreds of stores, affecting 49 states. The closure follows Joann’s second filing of bankruptcy in early 2025, after initially filing in early 2024 before going private.
Joann Fabrics and Crafts store | Source: Getty Images
Founded in Cleveland, Ohio, JOANN started as a single store and grew into a major player in the sewing, fabric, and craft industry with a strong online presence. At the time, the decision to close “approximately 500” of its 850 locations marked a significant downturn for the company.
In a statement to USA TODAY, the company said it aimed to “right-size its store footprint,” adding, “This was a very difficult decision to make, given the major impact we know it will have on our Team Members, our customers and all of the communities we serve.”
To decide which stores to close, Joann looked at performance and potential. “A careful analysis of store performance and future strategic fit for the Company determined which stores should remain operating as usual at this time,” the statement read.
A Joann Fabrics store with a price check scanner and stocked aisles | Source: Getty Images
Although the company didn’t release an official list to the public, it submitted the locations set to close to the court as part of its Chapter 11 bankruptcy proceedings. It reportedly showed 533 locations were set to close, with Hawaii as the only unaffected state.
California was set to lose 61 stores. Florida faced 36 closures, while Michigan, Ohio, and Pennsylvania each lost 33 locations. Illinois faced 26 stores shut down, followed by New York with 24, Washington with 21, Indiana with 20, and Massachusetts with 19.
The closures are part of Joann’s Chapter 11 bankruptcy proceedings, which the company voluntarily initiated on January 15, 2025, in the U.S. Bankruptcy Court for the District of Delaware.
Joann stated that the filing is intended to “facilitate a sale process to maximize the value of its business.” Despite the bankruptcy, Joann stores and Joann.com remain open, and employees continue to receive wages and benefits.
As part of the process, Gordon Brothers Retail Partners, LLC was designated as a “stalking horse” bidder, meaning it has set a baseline offer for Joann’s assets. However, the company was still actively soliciting higher and better bids, which could lead to an auction if qualified offers were submitted.
Interim CEO Michael Prendergast acknowledged the difficult decision, citing “significant and lasting challenges in the retail environment,” along with the company’s financial struggles and inventory constraints.
“After carefully reviewing all available strategic paths, we have determined that initiating a court-supervised sale process is the best course of action to maximize the value of the business,” Prendergast said. “We hope that this process enables us to find a path that would allow JOANN to continue operating as a going concern.”
Prendergast acknowledged the dedication of Joann employees, recognizing their efforts in serving customers and supporting the company’s mission. He expressed gratitude for their commitment, especially amid the company’s challenges in recent years.
He reassured employees and customers, including sewists, quilters, crocheters, and crafters, that despite the restructuring, Joann remains committed to serving its creative community as it has for over eight decades.
To uphold this commitment, Joann filed motions to continue paying employees’ wages and benefits while keeping operations running. The company is also seeking court approval to use cash collateral to maintain liquidity during restructuring.
Joann’s bankruptcy falls under Chapter 11 of the U.S. Bankruptcy Code. According to the Internal Revenue Service (IRS), Chapter 11, or “reorganization,” is primarily for businesses but also applies to individuals with debts exceeding the Chapter 13 limit.
Debtors must create a repayment plan, and if it is not approved, the case may convert to Chapter 7 liquidation. The IRS stresses the importance of avoiding additional debt. Businesses must meet financial obligations, including taxes, while individuals may need to adjust tax withholding or increase payments.
As part of its Chapter 11 restructuring, Joann has set up a dedicated site for further information. The company’s customers and creditors can find more details at JOANNRestructuring.com.
The court filings and claims information are also available at cases.ra.kroll.com/Joann2025, or by contacting Kroll at (844) 712-2239 (U.S. toll-free) and (646) 863-7121 (international), or emailing Joann2025Info@ra.kroll.com.
Guiding JOANN through the process are Kirkland & Ellis as legal counsel, Centerview Partners LLC as financial advisor, and Alvarez & Marsal North America, LLC as restructuring advisor.
