Joann Fabrics, a prominent retailer in the fabric and craft industry, is facing significant challenges that have culminated in its announcement to close approximately 500 of its 800 stores nationwide. This decision marks the company's second bankruptcy filing within a year and highlights the severe difficulties it faces amidst a sluggish retail economy . The closures will impact all 50 states, with particular emphasis on states such as California, Florida, Indiana, Michigan, New York, Pennsylvania, and Washington. The company has described these inventory issues as "acute and unexpected," necessitating a strategic right-sizing of their store footprint to ensure future viability .
The states with the most stores closing include California with 61; Florida, 36; Pennsylvania, 33; Ohio, 33; and Michigan, 33. Joann developed from a single storefront in Ohio in 1943, expanding to a national chain. In Washington, over 20 stores are expected to close. 
Joann filed for bankruptcy last month for the second time in less than a year. The retailer first filed for Chapter 11 in March 2024, but it emerged a few weeks later as a private company and kept all of its stores open.
In its second bankruptcy filing last month, Joann blamed inventory issues that were “acute and unexpected.” The company had previously revealed in court documents that it faced an “unexpected ramp-down, and, in some cases, the entire cessation of production” of some critical products.
The company also said it at the time it was looking for a buyer. Newly filed court documents reveal that as the “sale process progressed, and prospective bidders continued to conduct diligence and refine their potential bids, the debtors and their advisors were able to identify a subset of underperforming stores that are unlikely to be considered or included in any going concern bid.”
Michigan, Ohio and Pennsylvania, 26 in Illinois, 24 in New York, 21 in Washington, 20 in Indiana and 19 in Massachusetts.
Ultimately, Joann's recent bankruptcy and subsequent store closures are emblematic of broader trends within the retail sector where consumer preferences shift rapidly alongside economic uncertainties. As retailers like Joann navigate these tumultuous waters by reevaluating their operational strategies and scaling back their physical presence , it raises critical questions about sustainability in an increasingly digital marketplace.
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