Joann Fabric Stores Are Closing in 49 States — Here’s Why

Joann, a prominent fabric and crafts retailer, has announced plans to close approximately 500 of its 800 stores across the United States, affecting nearly every state except Hawaii. This decision comes amid significant financial challenges that have led the company to file for Chapter 11 bankruptcy protection for the second time within a year. citeturn0news8

Background and Financial Struggles

Founded in 1943 in Cleveland, Ohio, Joann expanded over the decades to become a leading name in the fabric and crafts industry. However, in recent years, the company has faced mounting financial difficulties. In March 2024, Joann filed for Chapter 11 bankruptcy, citing declining sales and increased competition. The company emerged from this bankruptcy as a private entity, aiming to restructure its operations and reduce debt. citeturn0search15

Despite these efforts, Joann continued to encounter operational challenges, including inventory shortages and decreased consumer demand. These issues were exacerbated by a sluggish economy and rising competition from other retailers offering similar products. Consequently, in January 2025, Joann filed for Chapter 11 bankruptcy protection again, acknowledging that previous restructuring efforts were insufficient to stabilize the business. citeturn0news8

Store Closures and Strategic Decisions

As part of its bankruptcy proceedings, Joann conducted a comprehensive analysis of its store performance and decided to close approximately 500 underperforming locations. This move is intended to “right-size” the company’s footprint and align with its future strategic plans. Interim CEO Michael Prendergast stated that the decision was difficult but necessary, citing ongoing inventory challenges and a sluggish economy as significant contributors to the company’s untenable debt position. citeturn0news8

The closures will impact stores across 49 states, with California facing the largest number of closures at 61 locations. Other states significantly affected include Florida, Illinois, Massachusetts, Michigan, Ohio, and Pennsylvania. Hawaii is the only state where Joann’s stores will remain unaffected. citeturn0search0

Future Prospects and Industry Context

In its current Chapter 11 proceedings, Joann is seeking to sell the business, with a potential sale to Gordon Brothers Retail Partners under consideration. The company believes that selling the business is the best path forward to ensure its future viability. The specific timeline for store closures and the impact on employees remain uncertain, as the company awaits court approval to begin the closure process. citeturn0news8

Joann’s challenges reflect broader trends in the retail industry, where many brick-and-mortar stores are struggling due to changing consumer behaviors, increased competition from online retailers, and economic pressures. Experts predict that a significant number of physical retail locations may close in the coming years as companies adapt to these evolving market dynamics. citeturn0news11

In summary, Joann’s decision to close 500 stores is a strategic move aimed at addressing financial challenges and repositioning the company for future success amid a rapidly changing retail landscape.