Fabrics and crafts retailer Joann Inc. filed for Chapter 11 protection in Delaware bankruptcy court on Wednesday, marking its second filing in less than a year. The company, based in Hudson, Ohio, is facing $615.7 million in debt, with plans to sell its assets to resolve financial challenges.
Joann’s interim CEO, Michael Prendergast, explained in a first-day declaration that the company encountered unexpected inventory issues following its previous bankruptcy exit in April. These complications, combined with a slow retail economy, left Joann in an “untenable debt position.”
The company entered this bankruptcy with $615.7 million in debt, including $352.4 million in revolving credit and other obligations. Joann has secured a stalking horse bid from Gordon Brothers Retail Partners, which will establish a baseline price for the sale of its assets.
Joann had previously sought Chapter 11 protection in March, restructuring to reduce its debt by $505 million. After receiving approval for a prepackaged restructuring plan in April, Joann was able to refinance loans and retain control under its creditors, keeping over 800 retail locations open.
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