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The financial struggles facing retailers have been pretty devastating over the past year. Bed, Bath & Beyond, Tuesday Morning and Christmas Tree Shops have all had to declare bankruptcy and shutter all of their locations, while Rite Aid is closing many of its stores due to bankruptcy as well. Now, another huge chain is about to join their ranks.
According to Bloomberg News, JOANN Fabric and Crafts could file for bankruptcy as early as this week. Sources with knowledge of the matter told the outlet that the company would be handed over to its lenders to help shed debt. Talks with lenders have been ongoing for some time following a decline in sales. One exec explained that part of what's causing the issues is that customers are buying fewer items per transaction. It's a stark reality for the company, which fared very well during the pandemic, as people who were stuck inside picked up hobbies that the store caters to. Unfortunately, the momentum didn't last and profits dropped.
The bankruptcy discussions are still taking place and plans are not final. Insiders say the hope is that the company can find enough capital to quickly exit a chapter 11 bankruptcy. As for the fate of the brand's 829 stores in 49 states, that is currently unknown.