Joann, the fabrics and crafts chain, files for bankruptcy

File: A pedestrian walks past a Jo-Ann location in Davenport, Iowa, U.S., on Wednesday, Sept. 19, 2018. (Daniel Acker/Bloomberg via Getty Images)

Joann, the iconic fabrics and crafts retailer, has filed for bankruptcy protection but plans to keep its stores and website open as it refinances.

The Ohio-based company announced Monday a plan to enter Chapter 11 bankruptcy protection and become privately owned, perhaps as soon as next month.

The company, which was founded back in 1943, previously went private in 2011 — when it was purchased by equity firm Leonard Green & Partners for about $1.6 billion.

A decade later Joann, still majority owned by Leonard Green & Partners, went public in an initial public offering at $12 a share.

The company listed more than $2.44 billion in total debts versus about $2.26 billion in total assets in Monday's Chapter 11 petition, citing October 2023 data. In its filing, Joann said the company has received commitments for approximately $132 million in new financing and expects to reduce its debt by about $505 million.

Joann did not discuss the reasons behind their rise in debt, but the Associated Press noted that consumers have been spending less on non-essential items amid inflation.

Joann’s roughly 850 stores across the U.S. should not be affected, the company said, and there should be no immediate impact on customers or employees.

"There is no other retailer with the same ability to serve sewists, quilters, crocheters, crafters and other creative enthusiasts as we have for the past 80 years, and we take great pride in seeing the passion and engagement of our millions of customers and our Team Members," Chris DiTullio, Joann chief customer officer, said in a press release announcing the filing.

Information from the Associated Press was used in this report.