Joann Fabrics and Crafts files for Chapter 11 bankruptcy. Are Oklahoma stores in danger?
The crafting and fabrics retailer Joann has filed for Chapter 11 bankruptcy protection in Delaware, as it announced it is seeking to reorganize its finances.
The Ohio-based company said in a statement it has secured approximately $132 million in new financing and "related financial accommodations." The retailer said it expects to reduce its funded debt by about $500 million, half of its $1 billion total debt.
Joann Fabric and Crafts was originally founded in 1943 and sells crafting supplies like fabric by the yard, sewing machines, Cricut machines, yarn, home decor and more.
Here's what Oklahoma should be aware of.
What is Chapter 11 bankruptcy?
According to USCourts.gov, Chapter 11 bankruptcy "is frequently referred to as a 'reorganization' bankruptcy. Usually, the debtor remains “in possession,” has the powers and duties of a trustee, may continue to operate its business, and may, with court approval, borrow new money.
"A plan of reorganization is proposed, creditors whose rights are affected may vote on the plan, and the plan may be confirmed by the court if it gets the required votes and satisfies certain legal requirements."
Who owns Joann Fabrics?
Joann said the company expects to complete the Chapter 11 bankruptcy as early as April 2024. After that, it will become a private company, with shares no longer listed on any stock exchange.
The company previously went private in 2011, when it was purchased by the equity firm Leonard Green & Partners for about $1.6 billion. In 2021, Joann, still majority-owned by Leonard Green & Partners, went public at an initial public offering at $12 a share.
Will Oklahoma Joann stores close?
The company said it will not be closing any stores as part of the bankruptcy process. Joann's stores and its website will operate as normal. The retailer said customers, vendors, landlords and other trade creditors will not see a disruption in services.
Scott Sekella, Joann's Chief Financial Officer and co-lead of the Interim Office of the CEO said 95% of Joann's stores are cash flow positive.
Skella added that the bankruptcy protection agreement is a "significant step forward in addressing Joann's capital structure needs, and it will provide us with the financial resources and flexibility necessary to continue to deliver best-in-class product assortments and enhance the customer experience wherever they are shopping with us."
How many Joann Fabrics and Craft stores are in Oklahoma?
Joann currently operates around 850 stores in 49 states, with six stores in Oklahoma. Here's where all the stores are located:
This article originally appeared on Oklahoman: Joann arts and crafts retailer files for bankruptcy: What to know
