Joann confirms closing of all store locations

MARINETTE – Joann, the sewing and craft supplies retailer involved in Chapter 11 bankruptcy proceedings, has announced all of its stores, including its Marinette location, are liquidating merchandise and slated to close, following an announcement last week it had accepted a bid for its assets.

A Bankruptcy Court must approve the transaction, the company said. If the asset sale goes through, GA Group, which also goes by the name Great American Group, is expected to shutter all of Joann stores after the going-out-of-business sales are completed. Previously, about 350 of Joann’s 800 locations were expected to remain open and in business, according to media reports.

A large banner ad on Joann.com this week announced “take up to off 40% storewide” and “all sales final,” but it provided no details on exactly when the Marinette store on Roosevelt Road was closing.

“Joann leadership, our board, advisors and legal partners made every possible effort to pursue a more favorable outcome that would keep the company in business. We are committed to working constructively with the winning bidder to ensure an orderly wind-down of operations that minimizes the impact on all our stakeholders. We deeply appreciate our dedicated team members, our customers and communities across the nation for their unwavering support for more than 80 years,” the company spokesperson said.

Chris Caselton, owner of Quilter’s Haven in Menominee, Michigan, said she was sad to hear of Joann’s troubles. Her store, which sells fabrics for quilting, doesn’t stock the same merchandise as Joann’s because she used a different distributor, she said.

Caselton said some of her customers also have shopped at Joann’s in Marinette for items she didn’t stock in her boutique.

“I understand they went bankrupt. I don’t know the details. Certain ones are on the chopping block first – unless they can get a buyer,” Caselton said last week.

At its beginning 80 years ago, Joann had one store in Cleveland. It grew to become the nation’s category leader in sewing and fabrics with 800 locations in 49 states and an e-commerce site, according to information from Joann Inc. It aimed to be a destination for those seeking sewing and craft supplies and guidance, the company said.

Depressed sales during the Covid-19 period and after, along with a heavy debt load and a decline in its stock price, contributed to the company’s financial troubles.

Joann Inc. received written notice Oct. 19, 2023 from the Nasdaq Stock Market, where its stock traded publicly under the symbol JOAN, that it wasn’t in compliance because its minimum closing bid price had fallen to less than $1 per share for 30 consecutive days, according to a document filed with the Securities and Exchange Commission. While Nasdaq gave Joann until April 16, 2024 to regain compliance with a share price of $1 or more sustained for at least 10 days in a row, the company decided to go private.

Just before the company decided to allow the stock to be delisted, Joann filed an earnings statement with the SEC for the third quarter of 2023. At that time, Joann reported a net loss of $21.6 million for the third quarter compared with a net loss of $17.5 million for the third-quarter of 2022, according to financial results filed Dec. 3, 2023.

Its third-quarter 2023 net sales fell 4% to $539.8 million from the year-ago quarter, though the company said its e-commerce sales increased 11.5% and accounted for about 13% of the company’s third-quarter net sales. It reported gross profits of $282.1 million and a gross margin of 52%, an improvement from the third quarter of 2022. However, the company was carrying long-term debt of $1.15 billion as of Oct. 28, 2023, and had cash and cash equivalents of $28.3 million.

At the time, co-interim Chief Executive officer Chris DiTullio discussed a new social media strategy and said the company was winning in its core categories.
Chief Financial Officer and Co-Interim CEO Scott Sekella described the company’s need to cut about $225 million in costs. He said the company would rely on advanced data analytics as it sought to reduce costs.

The company had about 18,000 employees, according to an April 2024 news release that announced Joann was emerging from a court-supervised restructuring and had cut its funded debt by half through new financing of $153 million. At that time, no store closures or layoffs were expected to be necessary.

“We see great opportunities ahead for this business and are as committed as ever to our customers, team members and communities nationwide,” said DiTullio in April 2024.

Sekella shared DiTullio’s optimism after the restruct a year ago. “We have now emerged as a significantly strengthened business and will continue to invest in our teams, communities and the customer experience,” he said. Sekella was offered a $400,000 cash-retention bonus, to be paid March 8, 2024, if he agreed to stay at the company for at least six months.

Joann’s stock was officially delisted in March 2024, according to SEC documents. The company’s 201 million shares were converted on April 30, 2024 to 200 million shares of New Common Stock valued at one cent per share, and 1 million shares of preferred stock was valued at the same price. This valued the company’s stock at $2 million.

More recently, the company found itself back in bankruptcy court and facing liquidation. With Great American Group LLC, or GA Group, as the highest bidder for Joann’s assets as of Feb. 23, the next step is liquidating merchandise. GA Group offers appraisal, advisory and liquidation services to other companies. It isn’t a retailer.

Great American Group, which had been owned by diversified financial services company B. Riley Financial for the past 10 years, was sold to funds managed by Oaktree Capital Management L.P. in November 2024, according to a statement on its website.

Publicly traded B. Riley said in a news release it expected to record a fourth-quarter gain of about $235 milllion on its investment in GA Group. It was scheduled to announce its fourth-quarter earnings on Monday, March 3, after the deadline for this story.

“We are forever grateful for the partnership B. Riley provided in our growth path and look forward to continued growth with a new partner in Oaktree,” GA Group said on its website. Oaktree Capital Management is a financial firm specializing in alternative investments.

A reporter’s email to GA Group with a request for more information on the Joann transaction wasn’t responded to at press time.