CONNECTICUT — Fabric and craft retailer giant Jo-Ann, which has 10 stores in Connecticut, has filed for Chapter 11 bankruptcy protection as it struggles to recover from post-pandemic-related losses and a change in customer spending habits.
All of its 850 stores will remain open during the Chapter 11 bankruptcy proceedings, which is allowed by federal law. The 81-year-old Ohio-based retailer made the announcement Monday.
Jo-Ann’s Connecticut stores include:
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The company said in an accompanying statement that it has acquired $132 million in new funding, which is to be used to reduce its debt by approximately $505 million.
Over the past few years, Jo-Ann’s debt has climbed to $1 billion, filings show.
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Sales had slumped after a jump during the pandemic, when Americans were isolated in their homes and spent more money on sewing and craft supplies, filings show. Many people had to cut back on their discretionary spending during the recent period of inflation, officials said.
Jo-Ann customers will not experience any disruption of service, and the company “remains as focused as ever on providing customers with quality products and services that inspire their creativity,” according to the statement.
“This agreement is a significant step forward in addressing Joann’s capital structure needs, and it will provide us with the financial resources and flexibility necessary to continue to deliver best-in-class product assortments and enhance the customer experience wherever they are shopping with us,” Jo-Ann Chief Financial Officer Scott Sekella said.
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