The filings have been flying in the Joann bankruptcy case, and I’ve got another update for you. Earlier this week I told you about the company asking the bankruptcy court for permission to close around 500 of their 800 retail locations in the hope that would make the company more attractive to a buyer.
To recap, the latest Joann bankruptcy filing (and the second in the past year) was filed Jan. 15, and the company had a deal with Gordon Brothers to buy the company for the purpose of liquidating all merchandise and closing all stores. In the meantime, they were taking other bids to buy the company.
They since decided that those 500 some “underperforming” stores should start the process of closing so that any potential new buyer would not have to deal with them. In a hearing today (Feb. 14, 2025) the court said it would allow the closing of the stores, and the company had previously said store closing sales would begin on Saturday, Feb. 15, 2025. The timing was hoped to capitalize on the President’s Day long weekend, which may bring out more shoppers.
The court ruled that Joann had “advanced sound business reasons” for closing the stores, and also gave them permission to add more stores to the list in the future.
As I mentioned in the previous post, gift cards will no longer be honored and no returns, refunds or exchanges will be accepted 14 days after this order goes into effect (so, Feb. 28 or so).
The company said the closures could take several months, and in a filing on the amended stalking horse bid (that’s the deal they have with Gordon Brothers) they provided more of a timeline for what could happen to those stores as well as the remaining stores should that bid go through.
This filing said the court should enter a final bid procedures order by Feb. 14 (which it did), with a deadline for new bids of Feb. 18. If multiple bids are received, an auction would be held no later than Feb. 21, and the court should approve the sale by the 21 if there is no auction, and Feb. 26 if there is. If no auction is needed, the notice of the winning bidder should come on Feb. 19. If there are no other bidders, the final approval for the sale to Gordon Brothers should happen by Feb. 26.
Subject to those terms, the new owners would then determine when to begin going out of business sales at the remaining stores, which would be concluded by May 31, 2025, but they could be completed earlier than that at their discretion. That leads me to assume the stores closing in the first round will be fully closed before that date, too.
Part of the court order today included store closing procedures, which indicate that stores that are closing should only be open during their normal business hours, but it didn’t say how long the stores will be kept open before permanently closing.
As a reminder you can find the full store list at the Joann Restructuring website, and if you find reading court documents fun, you can check out the full docket. (The above is from documents 431 and 443.)
We’ll keep updating you on the Joann bankruptcy proceedings as more happens.
