Joann, the financially struggling fabrics retailer, is shutting down 500 out of its 800 physical locations.
Joann, a major retailer in the U.S., announced that around 500 of its stores will be closing due to a necessity to "right-size our store footprint" as part of their strategy for a stable future. This decision will undoubtedly have a significant impact on their team members, customers, and the communities they serve.
"Making this tough call was heart-wrenching," stated a Joann spokesperson. Despite the challenges ahead, the company remains hopeful for a brighter future.
While Joann did not disclose a specific list of affected locations, court filings reveal that stores in all 50 states will be closing, with California, Florida, Indiana, Michigan, New York, Pennsylvania, and Washington being heavily impacted.
Joann's bankruptcy filing is its second within a year. In March 2024, the company initially filed for Chapter 11 but emerged as a private company, keeping all its stores open. However, in its latest filing last month, Joann cited inventory issues and the "unexpected ramp-down, and, in some cases, the entire cessation of production" of certain critical products as reasons for seeking bankruptcy protection.
The retail giant also pointed out that it had been seeking a potential buyer during this period. Further court filings reveal that their store optimization efforts led to the identification of underperforming stores, which may not be included in any going-concern bid.
Joann's challenges mirror those of other brick-and-mortar stores struggling to remain financially viable in the current market. With many Americans cutting back on discretionary purchases due to inflation, the retail landscape has shifted.
Some brands that were previously on a downward spiral before the pandemic experienced a shopping boom during and after the pandemic. But, as retail patterns return to normal, some of these brands are now heading back towards bankruptcy.
Like Joann, other retailers such as Kohl's and Macy's, have also announced store closures this year. Coresight Research predicts that over 15,000 stores will close in 2025 – over double the number from last year.
The demise of brick-and-mortar stores is often linked to several factors, such as:
- Declining sales due to changing consumer behaviors and waning demand for certain products.
- Inventory shortages and inconsistent deliveries from suppliers, making it challenging for retailers to keep their shelves stocked.
- Discontinuations of essential items from suppliers.
- The rise of e-commerce and online shopping, leading to challenges for traditional retailers.
- Financial constraints and substantial liabilities.
Joann's store closures will likely affect numerous communities, but the company is committed to finding a way forward. Their ongoing efforts reveal their determination to adapt and survive in this evolving retail landscape.
The business decision to close 500 stores is aimed at managing Joann's store footprint, as mentioned in the company's strategy for a stable future. Despite the challenges, Joann remains hopeful for a brighter future in the face of these store closures.
