Joann Fabrics is closing 500 stores, including more than two dozen Pa. locations, amid bankruptcy

Struggling fabric and crafts seller Joann plans to close about 500 of its stores across the U.S. — or more than half of its current nationwide footprint.

The move, announced Wednesday, arrives amid a tumultuous time for Joann. Last month, the Hudson, Ohio-based retailer filed for Chapter 11 bankruptcy protection for the second time within a year, with the company pointing to issues like sluggish consumer demand and inventory shortages.

Joann previously sought Chapter 11 in March 2024 and later emerged as a private company. But after operational challenges continued to pile up, Joann filed for bankruptcy again in January. It’s now looking to sell the business — and maintained in a filing Wednesday that closing “underperforming” locations is necessary to complete that process.

“This was a very difficult decision to make, given the major impact we know it will have on our Team Members, our customers and all of the communities we serve,” the company said in a statement sent to The Associated Press. “(But) right-sizing our store footprint is a critical part of our efforts to ensure the best path forward.”

Joann currently operates around 800 stores across 49 states. More than two dozen Pennsylvania locations throughout the state are part of the closure, as well as stores in Arizona, California, Colorado, Florida, Georgia, Illinois, Michigan, New York, Texas and more.

When exactly those closures will take place and how many employees will be impacted has yet to be seen. Joann’s Wednesday motion seeks court permission to begin the process.

Joann’s roots date back to 1943, with a single storefront in Cleveland, Ohio. And the retailer later grew into a national chain. Formerly known as Jo-Ann Fabric and Craft Stores, the company rebranded itself with the shortened “Joann” name for its 75th anniversary.

Both of Joann’s bankruptcy filings seen over the last year arrived amid some slowdowns in discretionary spending — notably with consumers taking a step back from at-home crafts, at least relative to the early COVID-19 pandemic boom. Joann has also faced rising competition in the crafts space from rivals like Hobby Lobby, as well as from larger retailers, like Target, who now offer ample art supplies and kits.

And, while Joann turned to implementing a new business plan after emerging from bankruptcy last spring, “unanticipated inventory challenges post-emergence, coupled with the prolonged impact of an excessively sluggish retail economy, put (Joann) back into an untenable debt position,” interim CEO Michael Prendergast noted in a sworn court declaration filed when Joann initiated its latest Chapter 11 proceedings on Jan. 15.

Prendergast explained that inventory shortages had significant ripple effects on Joann’s core business, particularly when “in-stock levels eventually dropped by upwards of 10%” and led to a “new phase of operational distress.”

Citing these and other macroeconomic challenges seen in the retail space over recent years, Joann has maintained that a sale of the business is the best path forward. The company says it has a proposed “stalking horse” bid agreement with Gordon Brothers Retail Partners.