Joann Fabrics in State College, PA to Close Amid Bankruptcy Proceedings
A major craft store in State College, PA, Joann Fabrics, located at 505 Benner Pike, is set to close its doors. This decision comes as part of a larger restructuring effort by the national retailer, which has filed for Chapter 11 bankruptcy protection. The State College location is among hundreds of "underperforming" stores that the company intends to close immediately, according to a court filing.
Bankruptcy and Store Closures
Joann's recent court filing indicates a plan to initiate going-out-of-business sales at the impacted stores, pending court approval. The company has filed for Chapter 11 bankruptcy protection for the second time in a year. The decision to close underperforming stores is a critical part of their efforts to ensure the best path forward for Joann. The company is looking to close over 500 stores across the nation.
Impact on Employees and Community
The closure of the Joann Fabrics store in State College will undoubtedly affect its employees and the local community. The exact number of employees affected at the State College location remains unclear. In a written statement, a Joann spokesperson acknowledged the significant impact these closures would have on team members, customers, and the communities they serve. The company stated that a careful analysis of store performance and future strategic fit determined which stores should remain operating as usual.
Financial Troubles and Restructuring
In March, Joann filed for bankruptcy in a restructuring deal that made the chain a private company and delisted it from the Nasdaq stock exchange, NPR reported. The company had previously emerged from Chapter 11 bankruptcy protection a month later without closing stores after becoming a private company and shedding about half of its $1 billion in debt.
Joann's bankruptcy filing indicated that the company was seeking a buyer. However, court documents stated that as the sale process progressed and prospective bidders conducted diligence and refined their potential bids, the debtors and their advisors identified a subset of underperforming stores unlikely to be considered or included in any going concern bid.
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Broader Retail Trends in Benner Pike
Joann is not the only storefront in the Benner Pike area facing closure. Big Lots, located at 503 Benner Pike, is currently holding a store-closing sale after announcing in December that all of the discount retailer’s locations would be closing. Additionally, Party City, situated in the Benner Pike Shops, recently closed after initiating a store-closing sale.
Other Pennsylvania Locations Affected
Besides the State College location, a number of other Pennsylvania locations were on the list, including the Altoona and Johnstown locations. Among the other Pennsylvania stores eyed for closure are locations in Selinsgrove, and Whitehall in the Lehigh Valley. The Dickson City location in Lackawanna County is also among the stores slated for closure. Joann seeks to close a number of stores in Pennsylvania as part of bankruptcy proceedings.
Company Statement
“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 wrote in a statement to multiple media outlets.
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