Joanne, a major fabric and crafts retailer, announced Monday that it will file for bankruptcy as consumers cut back on spending amid tough economic conditions.
The retailer recently reached an agreement with a majority of its financial and other financing parties to provide the company with approximately $132 million in new financing, while reducing the company’s balance sheet debt to approximately $500 million. We were able to save $5 million. according to Announcement from Joan. Retail sales across the U.S. economy have remained sluggish in recent months, and rose only 0.6% month-on-month in February, excluding inflation, as consumers refrained from purchasing non-essential items as prices rose. In the month, it decreased by 1.1%. (Related: ‘Economic disaster’: Biden’s budget dreams will further fuel sky-high inflation, experts say)
“Over the past several months, Joanne has achieved meaningful business improvements by implementing cost reduction initiatives to focus, simplify and grow,” chief customer officer Chris DiTullio said in a release. “We appreciate the support of our financial and industry stakeholders on this agreement and their confidence in our ability to continue to drive positive change in business. No other retailer has the ability to serve crafters, crafters, and other creative enthusiasts. We take great pride in witnessing the passion and engagement of our millions of customers and our team. Members.”
Joanne currently operates more than 800 stores in the U.S., with 95% of them cash flow positive, according to the announcement. The company will continue to operate its stores and e-commerce website despite the filing, but upon completion of the transaction it will become a private company owned by some financial institutions and will no longer be listed on the stock exchange. .
‘Economic disaster’: Biden’s budget dreams will further fuel sky-high inflation, experts say https://t.co/UgLBZzTbtE
— Daily Caller (@DailyCaller) March 17, 2024
The company’s third-quarter net sales decreased 4.1% year over year to $539.8 million, representing a net loss of $21.6 million for the quarter. according to Go to Joan’s earnings report. Joan’s long-term debt was approximately $1.15 billion as of October 28, 2023.
Inflation remains high, with the consumer price index rising 3.2% year over year in February, following a 3.1% rise in January, well above the Federal Reserve’s 2% target. . In an effort to slow inflation, the Fed has set the federal funds rate at a 23-year high between 5.25% and 5.50%, putting upward pressure on interest rates across the economy.
Joan did not immediately respond to a request for comment from the Daily Caller News Foundation.
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