Joann Fabrics, a prominent arts and crafts retailer with approximately 850 stores across the United States, is navigating a challenging financial landscape that has led to the closure of six stores in 2025. The closures, part of a larger restructuring effort following a Chapter 11 bankruptcy filing in March 2024, reflect the broader struggles faced by traditional retailers in the post-pandemic era. While Joann initially benefited from a surge in demand for crafting supplies during the pandemic lockdowns, this trend reversed in subsequent years, leading to declining sales and mounting financial pressures. Adding to the company’s woes was a substantial long-term debt burden of $1.2 billion reported in December 2023. The closures represent a strategic move to mitigate losses and streamline operations as the company attempts to regain financial stability. Currently, the affected stores, located in Burlington, Iowa; Owings Mills, Maryland; Holyoke, Massachusetts; Ithaca, New York; Hickory, North Carolina; and Williamsport, Pennsylvania, are offering liquidation sales with discounts of up to 90 percent.
The retail landscape has undergone a seismic shift since the onset of the COVID-19 pandemic. Consumers increasingly embraced online shopping, accelerating a pre-existing trend and putting significant pressure on brick-and-mortar stores. This shift has led to widespread store closures across the retail sector, with projections indicating that nearly 25 percent of America’s largest shopping malls may close by 2027. Joann’s struggles exemplify the challenges faced by retailers attempting to adapt to this evolving landscape. While the initial pandemic-driven surge in crafting provided a temporary boost, it was not sustainable in the long term. The company’s substantial debt load, coupled with the return to pre-pandemic shopping habits, compounded its financial difficulties and necessitated the store closures. Experts point to the combination of reduced foot traffic, decreased discretionary spending, and the lifting of pandemic-era rent concessions as contributing factors to the current retail climate.
Joann’s financial predicament is not unique. Numerous retailers are grappling with similar challenges, including declining sales, increased operating costs, and the need to adapt to changing consumer preferences. Experts have offered various perspectives on the factors contributing to Joann’s financial difficulties. Some cite the company’s high debt load as a primary driver, while others emphasize the broader trends impacting the retail sector. The rise of online shopping and the decline in discretionary spending have created a challenging environment for many traditional retailers. Furthermore, the lifting of pandemic-era rent concessions has added to the financial burden faced by brick-and-mortar stores. These pressures, combined with Joann’s pre-existing debt, have created a perfect storm that has forced the company to take drastic measures.
Joann’s chief financial officer, Scott Sekella, has affirmed the company’s commitment to its suppliers, partners, employees, and customers, emphasizing a focus on maintaining normal operations during this restructuring period. Industry analysts and financial experts have offered insights into the company’s situation, highlighting the challenges posed by the post-pandemic retail environment. R.J. Hottovy of Placer.ai points to the normalization of crafting demand and increased operating costs as key factors. Umer Paracha of Topsort emphasizes the need for retailers to adapt to evolving consumer habits and embrace omnichannel strategies. Alex Beene of the University of Tennessee at Martin sees Joann’s struggles as reflective of broader problems facing retailers in the post-pandemic era. Kevin Thompson of 9i Capital Group identifies excessive debt, oversaturation of stores, and lingering pandemic effects as contributing factors. Michael Ryan of MichaelRyanMoney.com argues that Joann is caught in a “middle-market squeeze,” lacking the agility of smaller craft stores and the scale of retail giants.
The immediate future of Joann Fabrics involves navigating the bankruptcy process and implementing strategies to ensure long-term viability. The current store closures are likely a first step in a broader restructuring effort. The liquidation sales offer an opportunity for shoppers to benefit from significant discounts, while the company aims to reduce inventory and generate cash flow. Experts anticipate further store closures as Joann continues to streamline its operations and address its financial challenges. The company will need to find ways to reduce costs, improve efficiency, and adapt to the changing retail landscape. This may involve further downsizing, renegotiating leases, or exploring strategic partnerships. Ultimately, the success of Joann’s restructuring will depend on its ability to navigate these challenges effectively and emerge as a stronger, more sustainable business.
Looking ahead, the survival and success of retailers like Joann Fabrics will depend on their ability to adapt to the evolving consumer landscape and embrace innovative strategies. Experts emphasize the importance of omnichannel experiences, blending physical and digital shopping in ways that meet modern consumer expectations. This may involve integrating digital tools, leveraging data-driven insights, and creating personalized shopping experiences. Retailers that can successfully navigate this “phygital” landscape will be best positioned to thrive in the increasingly competitive retail environment. Furthermore, managing debt levels and optimizing store portfolios will be crucial for long-term sustainability. Joann’s future hinges on its ability to learn from its current challenges and emerge as a more agile and responsive retailer, capable of meeting the evolving needs of its customer base.
