A massive crafts retailer is now exiting its bankruptcy in the coming days as its organizational plan receives the green light from court.
Joann expects to cut a whopping $505 million in debt and emerge from bankruptcy as a privately held company, reports Retail Dive.
Upon exiting bankruptcy, Joann will be a privately held company owned by its creditors.
Under the plan approved by U.S. Bankruptcy Court Judge Craig Goldblatt in Delaware, Joann’s creditors agreed to cancel nearly $505 million of the company’s nearly $1.1 billion in long-term debt.
After filing for Chapter 11 on March 18, Joann says it kept all of its 815 stores open and retained the jobs of its more than 18,000 employees during bankruptcy with a $132 million commitment from its financial stakeholders.
Joann’s bankruptcy exit plan will allow the company to emerge from Chapter 11 with a significantly deleveraged capital structure and to obtain long-term liquidity without affecting the business’s unsecured creditors, Chief Financial Officer Scott Sekella said in court documents.
The company cut jobs and sought to cut $225 million in supply chain, product and corporate costs last year.
It also did a sale-leaseback of its Ohio corporate headquarters and restructured its field and corporate operations.
But ultimately, those actions weren’t enough to avoid bankruptcy.
Sekella, who is also serving as co-lead of the company’s interim office of the CEO with Chief Customer Officer Chris DiTullio, noted that 100% of the company’s creditors supported the restructuring.
“We are pleased to have reached this significant milestone less than 40 days after initiating our court-supervised process,” DiTullio said in a statement.
As a result of the deal, “Joann will move forward with a strengthened financial foundation, allowing us to invest in customer experience enhancements, our best-in-class product assortments, and our more than 18,000 team members nationwide.”
Founded about 80 years ago, 96% of Joann’s retail stores were profitable when it filed for bankruptcy.
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Also Read: A Massive Grocery Chain With 400 Stores Is Now Closing
Other Economy News Today
A massive shoe retailer now announces a new wave of layoffs to hit headquarters this summer, affecting over 700 employees.
Nike has announced its ‘second phase’ of mass layoffs, effective June 28, according to a Worker Adjustment and Retraining Notification (WARN) filing.
A total of 740 employees will be impacted in the retailer’s home state.
The layoffs are part of the 2% workforce reduction Nike announced in February, which is taking place across two phases, the company confirmed via email.
Nike said job titles and the number of employees in each category would be provided at a later date, once the company has determined them.
Bumping rights are not available for the impacted employees, reports Retail Dive.
“Nike’s always at our best when we’re on the offense. The actions that we’re taking put us in the position to right-size our organization to get after our biggest growth opportunities as interest in sport, health and wellness have never been stronger,” Nike said in a statement.
“While these changes will impact approximately 2% of our total workforce, we are grateful for the contributions made by all Nike teammates.”
The layoffs are tied to a cost-savings plan Nike unveiled in December, which is aimed at generating up to $2 billion in cumulative savings over three years.
Based on the company’s last annual report, the layoffs to 2% of its total workforce will impact more than 1,600 people.
Savings from the plan are set to be reinvested in driving growth, innovation and profitability.
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Also Read: A Massive Grocery Brand Now Files For Chapter 11
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