A beloved retailer with 850 stores will now file bankruptcy in days after launching a massive liquidation sale, sources report.
The revelation comes days after a Joann store in Ohio launched a 90% off closing-down sale, reports The-Sun.
The fabric and craft specialty retailer has about 850 outlets across about 50 states.
But its bosses are currently considering lodging a bankruptcy filing as soon as next week, claimed Bloomberg.
Joann is currently looking into entering a special deal with lenders to help it shed spiraling debt.
Secret talks are underway to see whether the firm can get extra capital to help shore up cash reserves, the business website added, citing unnamed sources.
The news comes days after Joann’s Wooster store in Ohio held a massive 90% off sale, including sewing patterns for $1.99.
The outlet closed on February 21, one month after the shuttering of the Joann’s Zanesville branch in the same state, said local Fox affiliate WJW.
Both the closures and bankruptcy fears follow months of discussion among shoppers on social media about the Hudson-based retailer.
A shopper wrote on Facebook, “Sad news if Joann fabric closes, but they shouldn’t have resorted to cheapening the quality of their fabric for one thing.”
And another woman commenting on the Bloomberg story about Joann planning a bankruptcy filing added, “Wow, they just opened one [store] here in La Habra, California in October 2023.”
Here’s what Credit Risk Monitor had to say:
“No two public companies are cut from the exact same cloth, yet the telltale signs of potential bankruptcy shown by craft retailer JOANN Inc. are universal: lots of leverage, recurring net losses, and negative free cash flow,” warned CreditRiskMonitor last December.
Joann has struggled amid a challenging environment for retailers, said Moody’s Investors Service.
The chain was established in 1948, and offers both online and in-store shopping.
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Also Read: 68 Essential Stores Are Now Closing in Pennsylvania
Other Economy News Today
This bankrupt clothing retailer is now having a massive sale of up to 90% off as it sets to close a major location.
Soft Surroundings, a women’s clothing retailer, is officially closing one of its stores in Kansas City, Kansas, reports The-Sun.
Located in the Country Club Plaza, the store has been in operation for 12 years.
An employee confirmed on Monday that the store’s last day of operation will be Sunday, February 25.
Shoppers will be able to score a whopping 70% to 90% off on inventory at the store through Sunday.
The clothing chain had over 40 stores across the US before it filed for bankruptcy last year.
All Soft Surroundings stores have either closed down or are in the process of getting shut down.
The company will still conduct direct-to-consumer business online via its website, which the apparel company Coldwater Creek acquired as part of the bankruptcy process.
Another popular fashion and clothing retailer, Rent the Runway, is also on the verge of filing for bankruptcy.
The clothing rental service has struggled with a variety of business operations, such as meeting customer demand and maintaining its active subscriber count, according to PYMNTS.
A report from CreditRiskMonitor revealed that the e-commerce platform has a 9.99% to 50% chance of filing for bankruptcy this year.
In an effort to revitalize the company, Rent the Runway executives formulated a restructuring plan that involves cutting 10% of its corporate roles, or 37 employees.
“With already strong unit economics and high margins, this new structure is designed to set the stage for the business to achieve free cash flow breakeven in fiscal 2024,” said the company.
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Also Read: A Cosmetics Company Now Makes Painful Store Closures
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