Joann files for bankruptcy as consumers pull back on nonessentials

Joann, long a destination for sewing and crafts enthusiasts, filed for bankruptcy Monday as consumers continue to scale back on nonessentials and as competition from online rivals grows.

The company, which was founded in 1943, said it does not plan to shutter any of its 829 stores. The Hudson, Ohio-based chain said in a news release that it had reached a deal to secure “approximately $132 million in new financing and related financial accommodations and expects to reduce funded debt on its balance sheet by approximately $505 million.”

Joann will become a private company after it completes the bankruptcy process, which could occur as early as next month.

Joann has locations on the North Side, South Hill and Spokane Valley.

Scott Sekella, Joann’s chief financial officer, said the “agreement is a significant step forward in addressing Joann’s capital structure needs, and it will provide us with the financial resources and flexibility necessary to continue to deliver best-in-class product assortments and enhance the customer experience wherever they are shopping with us.”

Joann is the latest specialty retailer to seek bankruptcy protection in the face of falling sales as online retailers such as Amazon lure away shoppers. Bed Bath & Beyond, Christmas Tree Shops and David’s Bridal all filed for Chapter 11 last year. (Amazon founder Jeff Bezos owns The Washington Post.)

Though Joann is still a force to be reckoned with in the fabrics and textiles space, “it has lost customers to rivals over recent years,” said Neil Saunders, managing director of GlobalData, a business research and analytics firm. “Weakening store standards and declining customer service levels, partly because of staffing cuts, have made stores less desirable. And a desire for lower prices has driven some shoppers to alternatives like Hobby Lobby.