Retailer Joann Considers Second Bankruptcy Filing Within a Year
Joann Inc. is weighing another bankruptcy as it faces cash flow issues and lender demands
Joann, Bankruptcy, Hudson, Ohio, Retail, Lenders
Hudson: So, it looks like Joann Inc. is in a bit of a pickle again. The fabric and crafts retailer, which just got out of bankruptcy less than a year ago, is thinking about filing for bankruptcy again. Apparently, they’re running low on cash.
People familiar with the situation say they haven’t made a final decision yet. They’re also looking into other options, like selling the company or raising more funds. It’s a tough spot to be in.
One of the big issues is that lenders want Joann to set aside some cash to cover potential losses if they do go bankrupt. Plus, their inventory isn’t looking too hot, which is adding to the pressure.
This week, Joann’s debt prices took a nosedive after news broke that they’re working with some advisers to help fix their financial situation. They’ve brought in some big names to help out, but it’s still a rough ride.
Interestingly, lenders took control of Joann during their first bankruptcy, which allowed them to cut down on debt while keeping all their stores open. But just a few months after getting out of Chapter 11, they started asking vendors for discounts as sales dropped.
Joann isn’t alone in this struggle. Many retailers have been feeling the pinch lately as people cut back on spending due to rising prices and interest rates. Just last month, other companies like The Container Store and Party City also filed for bankruptcy.
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