NEW YORK — Fabric and crafts retailer Joann has filed for Chapter 11 bankruptcy protection, as consumers continue to cut back on discretionary spending and some pandemic-era hobbies.
In a Monday statement, the Hudson, Ohio-based company said that it expected to emerge from bankruptcy as early as the end of next month. Following this process, Joann will likely become privately owned by lenders and industry parties, the company said.
Joann’s more than 800 stores and its website will continue to operate normally during the bankruptcy process. It has stores in every state except Hawaii; 14 are in the San Francisco Bay Area.
Joann’s bankruptcy filing arrives amid both a slowdown in discretionary spending overall and during a time consumers are taking a step back from at-home crafts, at least relative to a boom seen at the start of the COVID-19 pandemic.
“Crafts, which did extremely well during the pandemic, have fallen back into slight declines as people find other things to do,” Neil Saunders, managing director of research firm GlobalData, told The Associated Press Monday — noting that many are now sacrificing these artsy activities to spend money on experiences outside of the house.
This puts pressure on all retailers with skin in the crafts market. But, Saunders added, challenges specific to Joann include the company’s rising competition.
Hobby Lobby, for example, has lower prices, and Target courts “casual crafters” with art supplies and kits, he said. He added that Joann has also let its “specialist-type service” slide with staffing cuts.
“There is still a place for Joann, but it’s going to take a lot of work to get back into a stable position,” Saunders said. “I think this bankruptcy was always inevitable. And actually, despite the disruption it causes, it’s a very good first step for getting the company back on track.”
The company was born in 1943, with a single storefront in Cleveland, Ohio. Formerly known as Jo-Ann Fabric and Craft Stores, it rebranded itself “Joann” in 2018.