Joann to close 500 fabric and craft stores, including 2 on Long Island

Fabric and crafts retailer Joann plans to close about 500 stores, including two on Long Island, after filing for bankruptcy protection twice in less than a year.

The stores closing on Long Island are in Westbury, at 580 Old Country Rd. in Salisbury Plaza, and West Babylon, at 735 W. Montauk Hwy. in the Great South Bay Shopping Center.  The closings will leave Joann with only one store on Long Island, in Sayville Plaza in Bohemia. 

Joann Inc. has asked a bankruptcy court to approve the store closings, as it attempts to right-size its store footprint and maximize the business' value, the Hudson, Ohio-based company said in an emailed statement Wednesday. 

“This was a very difficult decision to make, given the major impact we know it will have on our team members, our customers and all of the communities we serve. A careful analysis of store performance and future strategic fit for the company determined which stores should remain operating as usual at this time,” the company said in the statement.

Operating for more than 80 years, Joann had more than 800 stores in 49 states when it filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the District of Delaware on Jan. 15.

At that time, the retailer had about 19,000 employees, of which 3,400 were full-time and 15,600 were part-time workers, according to a court filing.

Joann said in January that it was seeking court approval to sell most of its assets. Boston-based Gordon Brothers Retail Partners would be the “stalking horse bidder,” which is the first bidder on assets in a bankruptcy and sets the minimum price for other offers.

A sale hearing is scheduled for Friday.

When Joann filed for bankruptcy in January, it had about $615.7 million in total funded debt obligations, according to a court filing.

Joann’s financial problems were caused by customers cutting back after the spending highs of the COVID-19 pandemic that started in March 2020, as well as the retailer having “an outsized capital structure and operational cost center,” Michael Prendergast, interim CEO, wrote in a bankruptcy document filed in January.

As a result, the then-publicly traded retailer filed for Chapter 11 bankruptcy in March and emerged from the proceedings in April as a private company, with immediate efforts to put its new business plan in motion, he wrote.

“Unfortunately, unanticipated inventory challenges post-emergence, coupled with the prolonged impact of an excessively sluggish retail economy, put Joann back into an untenable debt position,” he wrote.

By Tory N. Parrish

tory.parrish@newsday.comToryParrish1

Tory N. Parrish covers retail and small business for Newsday. She has worked at the Pittsburgh Tribune-Review and Observer-Dispatch in Utica, N.Y.