Joann, the troubled fabrics and craft supplies retailer that filed for bankruptcy earlier this year, is closing all its stores. This comes after the company announced plans to shutter 500 locations during its bankruptcy. However, attempts to save the business have been unsuccessful, resulting in the decision for a complete shutdown.
Joann notes that its physical and online stores, including its mobile app, will remain open through the shutdown process. During this time, customers can take advantage of its going-out-of-business sale. The company didn’t say when all of its stores would be closed, instead opting to provide further updates on its website.
What Led to the Joann Store Closures?
Joann held a bankruptcy auction for its assets with GA Group as the winner alongside the company’s term lenders. The company and its lenders are working alongside GA Group to conduct store closures and going-out-of-business sales.
Joann has struggled over the last few years as demand for its niche products has diminished. That resulted in a bankruptcy filing last year that saw the company go private. While there were hopes for a turnaround, Joann’s leadership waited too long to make the cuts needed to continue operations, resulting in another bankruptcy filing in January 2025.
What Investors Should Take Away from the Joann Store Closures
The biggest takeaway from the Joann store closures is the danger specialty stores face right now. These retailers offer niche products to an incredibly specific group of customers. While there’s demand for these products, brick-and-mortar locations are suffering as shoppers turn online for their purchases. Adding to that is inflation weighing on the economy, causing customers to spend less on hobbies and luxuries.
This means investors may want to consider stakes in department stores as they appeal to a wider range of consumers. Walmart (WMT) and TJX Companies (TJX) both carry Strong Buy ratings with WMT stock offering a potential 17.96% upside compared to TJX’s 14.06%.
