Joann Inc. has filed for Chapter 11 bankruptcy protection for the second time in less than a year. This time, the company is also trying to sell itself to another company with the aim of “maximizing business value.''
Interim CEO Michael Prendergast said Tuesday that the Ohio-based craft retailer has been battling a difficult retail environment.
This, combined with weak sales and suppressed inventory levels, forced the company to once again file for bankruptcy protection in Delaware Bankruptcy Court.
In March 2024, the company applied for Article 11 of the Federal Law for the first time in its 81 years of existence, and has since become a private company. At the time, none of the company's 800-plus stores across 49 states were closed.
“After careful consideration of all available strategic avenues, we have determined that initiating a court-supervised sale process is the best course of action to maximize the value of our business,” Prendergast said in a statement. said. “We hope that this process will find a way for Joan to continue operating as a going concern.”
The company announced that it is seeking court approval to begin the process of selling substantially all of its assets to Gordon Brothers Retail Partners LLC. Mr. Gordon will often serve as a “chasing” bidder, a party who agrees to make the first bid for the assets of a bankrupt company before the formal auction process begins.
According to Joanne, Gordon Brothers has announced its intention to liquidate the company and hold a going-out-of-business sale at all of its stores.
The company will continue to actively solicit alternative bids. The company said it has received inquiries from parties potentially interested in continuing to operate its stores and online operations.
If other eligible bids are submitted during the court-supervised sale process, Joan will conduct an auction, with Stalking Horse's bid setting the floor for the auction process.
Until then, the company plans to keep all stores open. Our online store will also operate as usual. Employees will continue to receive pay and benefits, the company said.
