Large Retailer with Store in Dubuque Files for Bankruptcy

The last few months of 2024 saw a number of major retailers announce they'll be closing their doors. Big Lots shut down a couple different Iowa stores. Party City is going out of business, with stores in Iowa, Illinois, and Wisconsin closing soon. This week alone, it was revealed Kohl's would be closing 27 stores, two of which in Illinois.

It's been a brutal start to the year for a lot of different industries, and now, another major retailer is facing the cold reality of having all of its stores close after filing for bankruptcy for a second time within a year.

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Joann, the popular fabrics and crafts retailer, has officially filed for bankruptcy yet again. The retailer has been around for 82 years, and said in a statement this week that "sluggish sales and inventory issues forced" force the company to again file for Chapter 11, per CNN. Joann last filed for bankruptcy in March 2024, and emerged without having to close any stores.

It remains to be seen if the retailer can emerge again. Court documents revealed that the company faced "an unexpected ramp-down, and, in some cases, the entire cessation of production" of items that have proven to be very popular in their stores. Sales slowed to the point where the company accrued $615 million in debt, resulting in an "untenable position" for the company.

Interim CEO Michael Prendergast spoke about Joann's latest bankruptcy filing in a press release:

[The] last several years have presented significant and lasting challenges in the retail environment, which, coupled with our current financial position and constrained inventory levels, forced us to take this step - Interim CEO Michael Prendergast, per CNN

Consumers are changing their habits rapidly, and many retailers are struggling to keep up. Post-pandemic, inflation caused Americans to dial back on many purchases, and the economic boom that came after massive lockdowns and restrictions has cooled tremendously.

Joann is now seeking a sale of all or most of its assets. The best case scenario is a situation similar to Big Lots, where Gordon Brothers Retail Partners purchased their assets to keep the brand alive. The same company is apparently "the stalking horse bidder" at an undisclosed price.

There's also the feeling that should Gordon assume control of Joann, they would close stores, something that wasn't done during the company's first time in bankruptcy. Joann has a location in Dubuque at 2600 Dodge Street.

We remain committed to continuing to support them and serving our customers – the sewists, quilters, crocheters, crafters and other creative enthusiasts we have served for more than 80 years – during the process - Interim CEO Michael Prendergast, per CNN

In recent years, Joann has seen loyal shoppers prefer competitors like Hobby Lobby and Michaels, something that was exacerbated by the company's inventory difficulties as of late. Time will tell if stores close and whether or not the company's hundreds of employees will retain their jobs.

Read more about Joann filing for bankruptcy for the second time on CNN's website.