Joann to shutter 500-plus US stores, 4 in Silicon Valley

Joann is packing up its yarns and paintbrushes at more than 500 stores across the U.S., including 61 in California, four of which are in Silicon Valley.

The struggling crafts retailer based in Ohio announced plans to close hundreds of stores after filing for Chapter 11 bankruptcy protection last month, the second time in a year, the Orange County Register and Silicon Valley Business Journal reported.

The reason for the closures: sluggish consumer demand and inventory shortages, according to the firm. Going out of business sales are expected to start Feb. 15 and could last several months, according to the company.

Joann had sought Chapter 11 in March, later emerging as a private company. But after operational challenges piled up, Joann filed for bankruptcy again in January.

It’s now looking to sell the business for an undisclosed price, according to the Register. And closing “underperforming” locations is needed to complete that process, it said in a Wednesday filing.

The company says it has a “stalking horse” bid agreement with Gordon Brothers Retail Partners, recently saved between 200 and 400 Big Lots stores from being liquidated, according to the Business Journal.

“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,” the company said in a statement sent to the Associated Press.

But “right-sizing our store footprint is a critical part of our efforts to ensure the best path forward.”

Joann has around 800 stores in 49 states. The initial list of the roughly 530 stores to close includes 61 in California, plus outposts in Arizona, Colorado, Florida, Georgia, Illinois, Michigan, New York, Pennsylvania and Texas, according to Joann’s restructuring website.

Joann’s roots go back to 1943, with a single store in Cleveland, which grew into a national chain. Once known as Jo-Ann Fabric and Craft Stores, the company rebranded itself to “Joann” for its 75th anniversary.

The retailer’s troubles began when consumers backed off from spending on at-home crafts after the early pandemic boom. Joann has also faced rising competition from rivals Hobby Lobby, as well as bigger retailers like Target, which now sell art supplies and kits, per the Register.

The five Joann stores slated to close in the South Bay are at 308 Walnut Street, in Redwood City; 19765 Stevens Creek Boulevard, in Cupertino; 225 Tennant Station, in Morgan Hill; and 1948 South El Camino Real, in San Mateo.

— Dana Bartholomew