Craft Store Popular With New Yorkers Files for Bankruptcy Protection

Joann, a popular crafts retailer with New Yorkers, has announced its decision to file for Chapter 11 bankruptcy protection.

The company, which experienced significant success during the pandemic, has since faced challenges recently due to customers cutting back on hobbies amid today's economic situation.

Experts say that the crafts industry has experienced a slight decline after doing so well during the pandemic. Now that people can move about freely again, they're doing things like going out for dinner and to sporting events more than they are crafting.

In addition to changing consumer preferences, Joann has also faced rising competition in the industry. Competitors offer lower prices which is more attractive to customers who are very price-conscious these days.

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Apart from the general challenges faced by the crafts retail industry, Joann has struggled with substantial debt and competition from other craft supply sources. The company's filing for Chapter 11 bankruptcy protection is a result of these ongoing financial hardships. According to the bankruptcy petition, Joann listed over $2.44 billion in total debts and approximately $2.26 billion in total assets, as of October 2023.

Originally established in 1943 and known as Jo-Ann Fabric and Craft Stores, the company has grown into a national chain. In 2011, Joann went private after being acquired by Leonard Green & Partners for approximately $1.6 billion. After a decade, the company returned to the public market in 2021 with an initial public offering at $12 per share. However, despite these efforts, Joann's financial struggles have led to the recent bankruptcy filing.

Experts feel that this bankruptcy filing is a vital first step for Joann to move toward recovery, giving the company a chance to restructure its debts and make necessary changes to adapt to the evolving crafts market.