Joann, an 82-year-old fabric and craft retailer, announced it has filed for Chapter 11 bankruptcy for a second time within a year due to financial and inventory issues.

The company originally announced in March 2024 that it had filed for bankruptcy protection in Delaware after securing around $132 million in new financing, which was expected to reduce its $1 billion total debt by about $500 million. On Wednesday, the Ohio-based retailer released a statement about the second bankruptcy filing and its intention to "facilitate a sale process to maximize the value of its business."

"Since becoming a private company in April, the Board and management team have continued to execute on top-and bottom-line initiatives to manage costs and drive value,” Michael Prendergast, interim CEO of Joann, said. “However, the last several years have presented significant and lasting challenges in the retail environment, which, coupled with our current financial position and constrained inventory levels, forced us to take this step."

Despite announcing the commencement of voluntary Chapter 11 proceedings, Joann said its stores and website are "open in the ordinary course and continue to serve customers."

Here is what to know about Joann's bankruptcy filing and what could come next for the struggling retailer.

What does the bankruptcy mean for Joann?

Joann is seeking court approval to sell substantially all of its assets, the retailer's statement reads.

Gordon Brothers Retail Partners, LLC, which recently bought much of Big Lots, would be the "stalking horse" bidder to acquire Joann, the company said. The proposed sale of Joann is "subject to higher and better offers" as the company "continues to actively solicit alternate bids."

If more qualified bids are submitted during the court-supervised sale processes, Joann plans to conduct an auction or auctions, according to the statement. In this scenario, the stalking horse bidder, Gordon Brothers Retail Partners, would set the floor for the auction process.

Joann announces store closures amid financial struggles

Joann has more than 800 stores across 49 states, but last week, Retail Dive reported that at least eight stores across Iowa, North Carolina, Maryland, Pennsylvania, New York and Massachusetts are closing.

Amanda Hayes, Joann’s director of corporate communications, told Retail Drive in a statement that the closures are "part of routine store location evaluation and optimization." She added how Joann "opened new and remodeled locations in recent months, including new stores in Great Falls, MT and Maplewood, MN."

Joann did not provide information on the date of the looming closings. Local news outlets in Pennsylvania, Iowa, Massachusetts and Delaware reported dates for local store closures ranging from Jan. 12 to Jan. 19. A worker at the Owings Mills, Maryland location said it would be closing Jan. 19.

According to Retail Dive, local news reports and confirmation provided to USA TODAY, the closing stores are located at:

• Maryland: 10377 Reisterstown Rd, Owings Mills
• Massachusetts: 2267 Northampton St., Holyoke
• New York: 2309 N Triphammer Rd, Ithaca
• North Carolina: 2102 US Hwy 70 SE, Hickory
• Iowa: 3200 Agency Street, Ste 110, Burlington
• Pennsylvania: 2481 E State St, Hermitage and 1746 E 3rd St, Williamsport

Who owns Joann?

Joann was founded in 1943 and sells various crafting supplies, including fabric by the yard, sewing machines, Cricut machines, yarn, home decor and more.

The company went private in 2011 when it was acquired by the equity firm Leonard Green & Partners for about $1.6 billion. In 2021, Joann, still majority-owned by Leonard Green & Partners, went public at an initial $12 a share.

Joann became a private company again in April following its initial bankruptcy filing, so its shares were no longer listed by the Nasdaq or any other national stock exchange.

Contributing: Mary Walrath-Holdridge & Emily DeLetter/ USA TODAY