After Chapter 11 bankruptcy, the end is near for beloved retailer
A new court filing suggests that the chain won't be saved and won't even return as an online-only brand.
Joann did not go out out business because it lacked customers. The chain has a dedicated, loyal following that has supported it through multiple bankruptcies.
The problem is that the company had debt that it simply could not handle. It explained the problem in its original bankruptcy documents.
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"Joann faced a severe liquidity constraint caused by an outsized capital
structure and operational cost center, subsequently impairing Joann’s ability to service its funded debt. As a result, Joann filed for chapter 11 in early 2024 to implement a prepackaged plan of reorganization and emerged from the Prior Cases in April 2024," it shared.
Basically, the company filed its first bankruptcy because it had too much to maintain operations. That's not a comment on its operations. It's very possible that without that debt, the company was profitable.
In theory, that first filing made the debt more manageable and allowed the company to operate. That's not actually what happened.
