Joann Inc. emerged from one bankruptcy process in 2024. Now, the crafting supplies retailer has voluntarily filed for Chapter 11 protection once again, committing to keep stores open as it seeks a new solution.

The company announced Jan. 15 that it began the bankruptcy process anew in the U.S. Bankruptcy Court for the District of Delaware. As it does, Joann will ask for court approval to sell its assets, with a so-called “stalking horse” bidder already lined up.

Joann is No. 299 in the Top 1000, Digital Commerce 360’s database ranking of North America’s leading retailers by online sales. In the database, Digital Commerce 360 categorizes Joann as a Toys & Hobbies retailer. Digital Commerce 360 projects that Joann’s online sales will reach $290.32 million in 2025.

Joann web sales by year

Why Joann filed for Chapter 11 bankruptcy again

“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,” said Michael Prendergast, interim chief executive officer at Joann, in the bankruptcy announcement. “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.”

Prendergast outlined Joann’s next steps, explaining why it filed for its second Chapter 11 bankruptcy in less than a year.

“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,” Prendergast stated. “We hope that this process enables us to find a path that would allow Joann to continue operating as a going concern.”

Who would acquire Joann’s assets?

Joann’s stated objective in its latest bankruptcy filing is to begin selling “substantially all of its assets under Section 363 of the U.S. Bankruptcy Code,” according to its public release. In doing so, those assets would be sold to Gordon Brothers Retail Partners, which it has lined up as a bidder. With court approval, Joann would then look for additional bidders and begin auctioning its assets.

Gordon Brothers is also working with Big Lots to sell off stores as a part of that retail chain’s bankruptcy. Joann has also engaged Kirkland & Ellis as its legal counsel. In the meantime, Centerview Partners LLC will serve as its financial advisor, with Alvarez & Marsal North America, LLC as a restructuring advisor.

“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.”

Do you rank in our databases? 

Submit your data and we’ll see where you fit in our next ranking update.

Sign up

Stay on top of the latest developments in the online retail industry. Sign up for a complimentary subscription to Digital Commerce 360 Retail News. Follow us on LinkedIn, X (formerly Twitter), Facebook and YouTube. Be the first to know when Digital Commerce 360 publishes news content.