HUDSON, Ohio — What started as a single storefront in Cleveland has grown to more than 800 stores across the U.S., but now major changes are ahead for Joann Inc., as the company prepares for an auction.
The federal bankruptcy court has approved the auction for Joann Inc., scheduled for Friday at 9 a.m. in New York City, after receiving interest from potential buyers.
The auction will take place both virtually and in person. The only disclosed bidder so far is Gordon Brothers Retail Partners, known as the "stalking horse" bidder, which will set the baseline price for the sale. However, the exact amount has not been revealed.
This follows Joann’s Chapter 11 bankruptcy filing in January for the second in less than a year, driven by over $1 billion in debt, rising interest rates, and supply chain issues.
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If the stores aren't sold, the company also announced plans to lay off 1,100 employees next month, mostly at its Hudson headquarters.
Founded in 1943, Joann has many longtime employees and loyal customers who are now uncertain about what to expect next.
Sharon Hoffman, a Case Western Reserve University law professor, explains that while store closures like this are common and stressful for long-time staff, employees can still find new opportunities.
“So, there is sort of an initial period of distress, maybe even mourning and being afraid, and then I think once people buckle down and say I have to think about my future, I have to take the right steps, I think many people find success,” said Hoffman.
Joann also revealed plans to close 500 of its more than 800 stores, including 33 in Ohio and nine in Northeast Ohio. Going-out-of-business sales have already begun and could last several months.
Once the auction concludes, a judge is scheduled to approve the sale to the winning bidder on February 26.
