Joann Files for Bankruptcy a Second Time, Seeking To ‘Maximize the Value of Its Business’ via Sale

Longstanding craft supply retailer Joann Inc. has filed for bankruptcy for a second time in the span of a year, as FOX Business reported.

With interim company CEO Michael Prendergast citing a challenging retail environment as the impetus behind the most recent Chapter 11 bankruptcy, Joann has also signaled a desire to sell itself to another company in the hopes it might “maximize the value of its business.”

As Retail Dive indicated, the craft supplies company had previously filed for bankruptcy in March 2024, becoming a private company in the process. At the time, analysts estimated its outstanding liabilities as standing at between $1 billion and $10 billion.

Joann Already Has a ‘Stalking Horse’ Buyer Lined Up, But an Auction May Still Occur for Company Assets

“Since becoming a private company in April, the Board and management team have continued to execute on top- and bottom-line initiatives to manage costs and drive value,” Prendergast stated in a press release.

“However, the last several years have presented significant and lasting challenges in the retail environment, which, coupled with our current financial position and constrained inventory levels, forced us to take this step. After carefully reviewing all available strategic paths, we have determined that initiating a court-supervised sale process is the best course of action to maximize the value of the business. We hope that this process enables us to find a path that would allow JOANN to continue operating as a going concern,” he continued.

Pointing to Gordon Brothers Retail Partners LLC as the so-called “stalking horse” bidder, or party agreeing to an initial bid on Joann before the formal auction process kicks off in earnest, FOX Business indicated that Joann had begun seeking court approval for the sale of substantially all assets.

As the press release corroborates and elaborates upon, this process would see Gordon Brothers setting the auction price floor for any potential sale, with Joann actively courting other valid bids during the formal auction process. Should other bids be tendered during the court-supervised sale process, an auction would then be called for.

Joann Interim CEO Thanks Workers and Customers for Their Loyalty

Finally, Prendergast took the time to speak directly to the company’s dedicated employees and loyal customers. The interim CEO noted that throughout the bankruptcy and sale process, Joann would continue to support and serve these stakeholders.

“On behalf of the Board and leadership, I want to thank the thousands of JOANN Team Members across the nation for their dedication to our customers and mission, especially in light of everything our company has gone through in recent years,” Prendergast said.

“We remain committed to continuing to support them and serving our customers — the sewists, quilters, crocheters, crafters and other creative enthusiasts we have served for more than 80 years — during the process,” he added.