The company expects all stores to liquidate their assets and close
of ConsumerAffairsJoann Fabrics has once again filed for Chapter 11 bankruptcy protection and said it would try to sell the business.
The company is seeking court approval to begin a process for the sale of substantially all of its assets under section 363 of the Bankruptcy Code, pursuant to which Gordon Brothers Retail Partners would serve as the stalking horse bidder, the company said in a statement on its website.
A stalking horse bidder is one that would set the floor for bids for the companys assets. The winning bid would have to equal or be higher than that.
If the sale to Gordon Brothers is ultimately completed, Gordon Brothers has indicated that it intends to pursue a liquidation of the companys assets and conduct going-out-of-business sales at all store locations. In the meantime, Joann stores and Joann.com remain open for business.
Significant challenges
Since becoming a private company in April, the board and management team have continued to execute on top and bottom-line initiatives to manage costs and drive value, said Michael Prendergast, Joann Fabrics interim CEO.
However, the last several years have presented significant and lasting challenges in the retail environment, which, coupled with our current financial position and constrained inventory levels, forced us to take this step.
Prendergast said the board determined that beginning a court-supervised sale process would be the best route to maximizing shareholder value.
The chain that would become Joann Fabrics was founded in 1943, with a single store in Cleveland. The name was changed to Joann Fabrics in 1963. The company operates 800 stores in 49 states.
Photo Credit: Consumer Affairs News Department Images
Posted: 2025-01-16 12:34:47
