Joann, an Arts-and-Creats Store, Will Be Taken Private During the Decay of COVID-19

The company will remain open, and its website will stay active, but it’s too soon for DIYers to be worried.

After going public in March 2021, JoAnn will delist from the stock market and become a private company, just two years later.

The company said in an SEC filing that COVID-19 had spurred growth in the crafting industry with people across the U.S. using the extra time at home to make their own masks.

The company believes that the increase in engagement by new and existing customers is a very encouraging signal for the future of the business.

The company said in a December earnings report that its third-quarter net sales had dipped by 4.1% compared to the same period the year before, and its long-term debt was roughly $1.2 billion.

Joann, the arts-and-crafts retailer that has operated for more than 80 years, has filed for bankruptcy as consumers pare back on D.I.Y. projects, leaving the company with mounting debt.

The chain, which is based in Hudson, Ohio, said in a statement on Monday that it had struck a deal with its lenders for a $132 million cash injection to help reduce its debt by $505 million, a process that will result in the retailer, which is listed on the Nasdaq stock exchange, being taken into private ownership. Its filing listed liabilities of $1 billion to $10 billion, and assets of $500 million to $1 billion.

The retailer, which sells yarn, fabrics and home goods, has been coming down from a short-lived sales boom during the pandemic lockdowns when there was a frenzy in consumers spending on at-home projects. Consumers pulling back on discretionary spending due to inflation has challenged the retail sector at large in the past two years.

In its most recent quarterly earnings report in December, Joann reported a dip in sales, which its executives attributed to a challenging retail environment. The company’s competitors, Michael’s and Hobby Lobby, are both privately owned, so it is unclear how they have performed amid those economic headwinds.

Leonard Green spun off Joann after buying it for over $1 billion in 2011. A few months after it rose, the stock price started to tumble, and now trades for about 20 cents a share.

Spinrite, Joann’s largest secured creditor, is owed about $12 million. It owes millions more to other yarn and fabric providers, as well as FedEx and the commercial real estate firm Jones Lang LaSalle.