US-based fabric and crafts retailer Joann, along with affiliates, has initiated voluntary prepackaged Chapter 11 bankruptcy proceedings to restructure its finances.
The 81-year-old company has signed a transaction support agreement with key financial stakeholders and additional financing parties, under which it will receive $132m in new financing and related financial accommodations.
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Joann aims to reduce its funded debt by $505m.
In its third quarter fiscal report 2024, released in December 2023, Joann disclosed a long-term debt of $1.14bn as of 28 October.
The financial restructuring will be conducted through a prepackaged court-supervised process, allowing Joann to maintain business as usual.
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The retailer’s 829 stores and online platform, JOANN.com, will continue to serve customers without interruption, while vendors and landlords can expect services to remain consistent.
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By GlobalDataJoann anticipates an expedited completion of the restructuring process by late April 2024.
Joann is set to become a privately held entity, owned by select lenders and industry parties, leading to the delisting of its shares from the Nasdaq and other exchanges.
Joann interim CEO and chief customer officer Chris DiTullio said: “Over the past several months, JOANN has made meaningful business improvements through the execution of our Focus, Simplify and Grow cost reduction initiative.
“We are excited by our progress on both top and bottom-line initiatives in the past year and are confident the steps we are taking will allow JOANN to drive long-term growth. We appreciate the support from our financial and industry stakeholders in this agreement, and their confidence in our ability to continue driving positive business change.
“There is no other retailer with the same ability to serve sewists, quilters, crocheters, crafters and other creative enthusiasts as we have for the past 80 years, and we take great pride in seeing the passion and engagement of our millions of customers and our team members.”
Joann filed for Chapter 11 in the US Bankruptcy Court for the District of Delaware.
Latham & Watkins is acting as legal counsel, with Houlihan Lokey and Alvarez & Marsal North America serving as financial advisor and restructuring advisor respectively.
