The future of Joann Fabrics and Crafts stores in Schererville, Hobart, and Michigan City is uncertain as the retail chain considers filing for bankruptcy, as reported by Bloomberg News. The suburban Akron-based retailer is reportedly burdened by heavy debt, with plans to potentially file for bankruptcy this week, which could result in control being handed over to lenders. The company hopes to reorganize and secure additional capital, but this could entail the closure of underperforming stores.
Joann Fabrics currently carries a debt of $976 million, a decrease from $1.1 billion at the end of the third quarter last year. Additionally, the company suffered a $200 million loss in the previous year, with net sales declining by 8.3% to $2.2 billion.
The traditional brick-and-mortar retail sector has faced significant challenges due to the growing dominance of e-commerce, consumer spending cutbacks influenced by inflation, and surging credit card debt. Several well-established retailers, including Bed, Bath and Beyond, Christmas Tree Shops, and Tuesday Morning, declared bankruptcy and shuttered all their stores in the past year.
Consumer spending has been impacted by rising grocery costs and inflation, resulting in a mere 0.2% growth in spending in January, according to the U.S. Department of Commerce. Joann Fabrics and Crafts, with 850 stores nationwide, is not immune to these economic pressures, operating stores at various locations including 715 U.S. 41 in Schererville and 1916 E. 80th Ave. in the Merrillville Plaza in Hobart.
