Joann Fabrics Announces Six Store Closures Amid Post-Bankruptcy Restructuring

The fabric and craft retail giant Joann is starting 2025 with the closure of six stores across multiple states, marking a significant development in its post-bankruptcy restructuring efforts. The company, which operates approximately 850 stores nationwide, continues to navigate financial challenges following its Chapter 11 bankruptcy filing in March 2024.

The affected locations slated for closure include stores in Burlington, Iowa; Owings Mills, Maryland; Holyoke, Massachusetts; Ithaca, New York; Hickory, North Carolina; and Williamsport, Pennsylvania. These closures are part of what the company describes as a routine evaluation and optimization of store locations.

The decision comes after Joann’s challenging financial period, during which the company accumulated substantial debt reaching $1.2 billion in long-term liabilities by December 2023. Despite experiencing a temporary surge in sales during the COVID-19 pandemic when home crafting activities peaked, the company has since faced declining customer traffic and mounting financial pressures.

Amanda Hayes, Joann’s director of corporate communications, diversity, and inclusion, emphasized that while some stores are closing, the company has simultaneously pursued expansion in other areas, including new store openings in Great Falls, Montana, and Maplewood, Minnesota. This strategic approach suggests a calculated effort to maintain presence in profitable markets while withdrawing from less successful locations.

Customers at the closing locations can expect significant discounts, with merchandise markdowns ranging from 70% to 90%1. The Burlington, Iowa location, for example, will continue its liquidation sale until its final closing date on January 19, with store managers indicating that fabric cutting services will eventually cease, leading to the sale of remaining fabric bolts as complete units.

Industry analysts attribute Joann’s struggles to several factors, including the post-pandemic shift in consumer behavior and intense competition from rivals like Hobby Lobby, which often offers lower prices. The retail landscape has become increasingly challenging, with research suggesting that up to 25% of America’s largest shopping malls could close by 2027.

Financial experts point to multiple factors contributing to Joann’s current situation. The company faces what some describe as a “middle-market squeeze,” being too large to operate with the agility of local craft shops yet too small to compete with retail giants like Walmart or Amazon. Additionally, rising tariffs and inflation have increased the costs of importing fabrics and other products, further straining the company’s finances.

In response to these challenges, Joann secured $132 million in fresh funding during its bankruptcy proceedings, which helped reduce its debt by half. The company has also undergone leadership changes, including the appointment of Michael Prendergast as interim CEO and internal promotions in key positions such as chief digital officer and store operations roles.

Looking ahead, retail experts suggest that more closures could be forthcoming as Joann continues to evaluate its operations. The company’s focus appears to be on maintaining profitability while adapting to changing consumer preferences and shopping patterns. To remain competitive, industry observers recommend that retailers like Joann must embrace modern retail strategies, including enhanced omnichannel experiences and improved customer engagement methods.