Joanne Fabrics & Crafts has filed for Chapter 11 bankruptcy protection in an effort to rebuild its finances.
Joanne said in a release accompanying the filing that its stores and company website will remain open and operations will continue as normal.
“Customers, vendors, landlords and other trade creditors will not see any disruption to service,” the company said in a release. “We remain as focused as ever on providing high-quality products and services that inspire our customers' creativity.
In its most recent quarter, Joanne released financial results showing more than $1 billion in debt, shrinking revenue and widening net losses, citing an “uncertain consumer environment.”
Wall Street reacted negatively to the news, causing Joan's stock to fall by up to 20%. The company went public in 2021 as the pandemic dragged on and home-based do-it-yourself spending activity was clearly booming. But after debuting at around $12 and rising to nearly $17, the company's stock is now worth less than $0.25.
Joanne has been without a permanent CEO since May last year, when Wade Mikron, who led the company for seven years, announced his retirement after a “difficult” year.
Chris DiTullio, Chief Customer Officer and Co-Head of the Interim Office of the CEO, said: “We are proud to support our financial and industry stakeholders in this agreement and to drive positive change in our business. We appreciate their confidence in our ability to continue to do so.” release.
“For the past 80 years, no other retailer has been better equipped to serve seamstresses, quilters, crocheters, crafters, and other creative enthusiasts than we are. We take great pride in seeing the passion and involvement of our customers and team members.”
