Joann to exit bankruptcy in ‘coming days’ — with no store closings, less debt
That was fast.
The fabrics and crafts retailer, which filed for bankruptcy in March, said the U.S. Bankruptcy Court for the District of Delaware has confirmed its prepackaged joint plan of reorganization. Joann expects to successfully complete its financial restructuring and emerge from the court-supervised process “in the coming days.”
Under the plan, Joann’s creditors agreed to cancel some $505 million of the company’s nearly $1.1 billion in long-term debt. Upon exiting bankruptcy, Joann will be a private company owned by some of its creditors.
Joann noted that its more than 800 stores have remained open during the process and that it was able to preserve the jobs of its more than 18,000 associates.
“We are pleased to have reached this significant milestone less than 40 days after initiating our court-supervised process,” said Chris DiTullio, chief customer officer and co-lead of the interim office of the CEO. “Joann will move forward with a strengthened financial foundation, allowing us to invest in customer experience enhancements, our best-in-class product assortments, and our more than 18,000 team members nationwide.”
Joann has been without a permanent chief since May 2023 when Wade Miquelon retired as president and CEO. In recent years, the retailer, an early winner during the pandemic, has been challenged with declining sales.
“With a strengthened balance sheet and improved liquidity, we are better positioned to work collaboratively with our vendors, business partners and landlords, and ultimately to inspire the creativity in our customers that helps them find their happy place,” said Scott Sekella, Joann’s CFO and co-lead of the interim office of the CEO,
Joann had overall net sales of $2.2 billion in 2023, according to its court filings.
Latham & Watkins LLP is serving as legal counsel Joann, with Houlihan Lokey serving as financial advisor and Alvarez & Marsal North America, LLC serving as restructuring advisor.