Bankrupt Joann’s 850 stores are set to go dark.
The fabrics retailer was sold to financial services firm affiliated with GA Group and Joann’s prepetition lender on Saturday at a bankruptcy court auction.
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“Subject to court approval of the transaction, the winning bidders plan to wind-down ongoing operations and conduct going-out-of-business sales at all Joann locations,” the retailer said on its website. “We are committed to working constructively with the winning bidder to ensure an orderly wind-down of operations that minimizes the negative impact on all Joann Team Members, vendors, customers and communities. Subject to court approval of the sale transaction, we expect to begin, or in some cases continue, going-out-of-business sales at all locations immediately.”
GA Group, formerly Great American Group, is best known for its asset disposition services. The affiliated subsidiary that won the bidding is GA Joann Retail Partnership. While Joann’s stores are shutting down, its intellectual property could still land a new owner down the road. However, any buyer of Joann’s IP assets is more likely to use the name for an online business rather than resurrect the banner for a slew of new retail stores.
Joann’s said earlier this month that it would shutter 533 locations, doors that were determined not to have any interest from potential buyers prior to the court auction. Those stores have already started going-out-business (GOB) sales. The remaining 317 stores still require bankruptcy court approval before they can begin their GOB sales.
Joann’s filed its Chapter 11 bankruptcy petition on Jan. 15. The chain previously filed for Chapter 11 in March 2024, but was able to negotiate a pre-packaged filing with its lenders. That enabled the retailer to exit Chapter 11 proceedings one month later with all stores intact.
Court documents indicated that the second filing was necessary as the retailer had to adjust to a consumer pull-back on spending as they adjusted to a post-COVID economy. The document filed by interim CEO Michael Prendergast said that the retailer’s “otherwise healthy post-COVID business was burdened by an outsized capital structure and operational cost center.” He explained that the combination created liquidity constraints that “impaired” the retailer’s ability to service its debt.
Joann’s posted $2 billion in net sales during the 2024 calendar year.
The additional Joann’s store locations that will be shut down add to the list of store closures led by big-box locations. Those doors include 695 Party City stores and at least 500 Big Lots locations, although 200 more could still close. A bankruptcy court judge approved the sale of 200 to 400 Big Lots stores to discount retailer Variety Wholesalers, Inc., but it isn’t clear yet what the final store tally will be that will survive the sale. In addition, there’s talk that 200 Forever 21 stores are slated for closure, and that 150 more could be on the chopping block if the chain can’t find a buyer for its operating entity.