In an article we shared last month, we discussed the bankruptcy filing of JOANN fabric stores. If you missed that article, you can find it here. This month I am sharing what we have learned since that initial filing and what happens next.
A substantial amount of small business owners and consumers have been waiting as the JOANN bankruptcy process plays out. JOANN filed for bankruptcy twice within the space of a year, raising many concerns about its viability. JOANN was a very large retailer in the craft industry. The first bankruptcy filing was to shed a large portion of its debt. Initially, this raised a lot of questions about why the second bankruptcy happened less than a year after the first.
As part of the bankruptcy proceedings, JOANN shared that it was looking for a buyer for the company. Bankruptcy proceedings have a predefined series of steps that occur at each part of the process. There is a specific timing window that companies have to bid on purchasing either part of or all of JOANN. When a large company fails, who buys it? It is like catching a falling knife. At the time of the bankruptcy, JOANN had over 800 stores. This would require an even larger company to step in.
