Joann, the national retailer of fabric and craft supplies, is going out of business and closing all of its roughly 800 stores across the United States. The announcement was made on February 18, 2025, following the company’s second bankruptcy filing. Joann, which has struggled financially over the years, cited increased competition from online retailers and established brick-and-mortar stores like Hobby Lobby and Michaels as reasons for its decline.
Founded over 80 years ago as Jo-Ann Fabrics, the beloved craft retailer once experienced sales boosts during the DIY trend brought on by the pandemic. Unfortunately, this surge proved unsustainable, leading to losses as competitors captured market share. According to retail analyst Neil Saunders, Joann’s struggles were evident long before the bankruptcy notices. He noted the brand had significantly lost ground to rivals.
This latest closure announcement follows Joann’s effort to restructure its assets over the past year. The retail chain filed for Chapter 11 bankruptcy for the first time on March 18, 2024, which aimed at restructuring its debt without closing down stores. At the time, the company assured the public of its resilience. Yet, after filing for bankruptcy again on January 15, 2025, it became clear to executives and board members alike, including Interim CEO Michael Prendergast, the company needed to sell its assets, leading to today’s announcement.
"Selling the company was the best course of action," Prendergast stated after the January filing. This resulted in Joann’s sale to the GA Group and its prepetition term lender, which agreed to assume ownership under bankruptcy court conditions.
The liquidation sales at Joann stores are set to begin immediately, and the process may take several weeks to complete. Gift cards will continue to be accepted until February 28, 2025. The retailer, citing the need for operational efficiency amid significant financial losses, stated it would also discontinue personalized discounts and not accept returns during this transition.
Joann’s struggle is indicative of broader challenges facing the retail sector, which has seen increased store closures. Following 2022’s closure of 1,680 stores and 4,070 closures reported by the National Retail Federation for 2023, the trend has continued with predictions for even more significant losses—up to 15,000 closures expected by the end of 2025. The competitive retail sector remains under enormous pressure, with numerous brands unable to cope with trends and consumer behavior shifts, as seen with Joann’s demise.
While Joann’s liquidation may be seen as the end of this significant chapter for the company, it serves as a reminder of the growing challenges traditional retailers face against the backdrop of the shifting retail environment. The chain’s longstanding history and beloved status among crafting enthusiasts will likely leave lasting impressions, even as patrons navigate the remaining stores for closing sales.