Fabrics and sewing retailer Joann has filed for Chapter 11 bankruptcy as it deals with waning consumer demand.
The 80-year-old retailer said in a statement on Monday it has received roughly $132 million in new funding that that will help it reduce its debt by $505 million.
The company said it plans to keep more than 800 of its U.S. stores open, as well as its website, which it said will “continue to operate as normal.”
Hudson, Ohio-based Joann has been threading the needle for some time. The retailer saw a boom in sales during the peak of the Covid-19 pandemic, led largely by shoppers in search of arts and crafts projects to fill the time.
Despite the boon, the company revenue has fallen in recent years, and with inflation now rising, customers are holding off on purchasing non-essential goods.
Scott Sekella, Joann’s chief financial officer, said the company’s reorganization efforts are a “significant step forward in addressing Joann’s capital structure needs. The restructuring will provide the company with “the financial resources and flexibility,” he added.
The company filed for Chapter 11 bankruptcy in the U.S. Bankruptcy Court for the District of Delaware and expects to complete the process quickly, as soon as late April.
Moreover, the filing means that Joann will not longer be listed on the Nasdaq or any other national stock exchange.