2025-01-11 02:32:34 :
(Bloomberg) — Fabric and crafts retailer Joann Inc., which was formed under Chapter 11 bankruptcy less than a year ago, is considering filing for bankruptcy again as it runs out of cash, people familiar with the matter said.
A final decision has not been made and the company is also exploring other options, including a potential sale and raising additional capital, people familiar with the matter said. The person spoke on condition of anonymity because the discussions were private.
Some of the people familiar with the matter said that lenders’ recent requirement that Joann set aside reserves to cover losses in bankruptcy and a lower reassessment of its inventory were among the factors that prompted Joann to file again.
Prices for Joan’s debt plummeted this week after Bloomberg News reported that the Hudson, Ohio-based company was working with advisers to help shore up its balance sheet and ease liquidity pressures. The privately held chain has partnered with Centerview Partners and Kirkland & Ellis, while a group of the company’s lenders are working with Gibson Dunn & Crutcher.
Representatives for Joan did not respond to requests for comment, and messages left for Centerview and Kirkland were not returned.
Lenders took control of the company during Joann’s first bankruptcy, which cut its debt but kept its more than 800 locations open. Bloomberg previously reported that months after the company exited Chapter 11 of the U.S. Bankruptcy Code in April 2024, the company began asking suppliers for rebates and retroactive discounts due to declining sales.
Joan is one of many retailers that have struggled over the past two years as consumers cut back on spending as inflation and interest rates rose. Container Store Group Inc. and Party City Holdco Inc. filed for Chapter 11 protection last month, with the latter choosing to cease operations.
More stories like this can be found at Bloomberg.com
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