WASHINGTON — Joann’s stock was delisted from the Nasdaq and will become privately owned following the bankruptcy process, which it expects to happen as fast as next month.
Fabric and crafts retailer Joann has filed for Chapter 11 bankruptcy as the company prepares for a restructuring that will remove it from the stock market as it struggles to retain customers.
In a statement released Monday, the 81-year-old company said it had secured $132 million in funding meant to cut its debt significantly. The company owes over $2.44 billion, according to Monday's Chapter 11 petition, with about $2.26 billion in assets.
The additional money, combined with other funding secured by the company, will allow Joann to cut approximately $505 million from the books, according to the statement.
"Over the past several months, JOANN has made meaningful business improvements through the execution of our Focus, Simplify and Grow cost reduction initiative,” said Chris DiTullio, the company's chief customer officer. "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.”
None of the company's more than 800 U.S. stores are expected to be affected by the bankruptcy, and will remain open alongside the Joann website.
In a notable move related to the Chapter 11 filing, Joann plans to go private after the bankruptcy process is completed — a step the company said could happen as quickly as next month. It will be owned by several of the company's lenders and industry parties, according to the company's statement Monday, although none of the to-be owners were immediately named.
Joann stock will delisted from the Nasdaq and other Wall Street exchanges as part of the restructuring. Before the news was announced Monday, it was trading for approximately 25 cents per share, but dropped 20% to $0.19 per share as the markets opened for the week.
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 Associated Press contributed to this story.