A popular fabric and craft store is facing financial uncertainty after declining sales and heavy debt decreased its recent CreditRiskMonitor FRISK Score to 1. JOANN Inc., popularly referred to as Joann Fabrics, faced a disappointing fiscal year that experts warn could be an indication of impending bankruptcy.
2023 was a rough year for popular box store chains. Bed, Bath, & Beyond, Tuesday Morning and Christmas Tree Shop declared bankruptcy and shuttered their stores, while others closed locations and cut staff as cost-saving measures, like CVS and Express. Financial information publisher CreditRiskMonitor conducted an in-depth analysis of several other beloved retailers, and 11 companies were found to have an elevated risk of bankruptcy over the coming year, Joann being one.
Historically, companies that receive a FRISK score of 1 have between a 10% and 50% chance of filing for bankruptcy. A FRISK score indicates a company’s level of financial stress, based on the probability of bankruptcy over a 12-month horizon, and is 96% accurate.
Third quarter fiscal 2024 results sees drop in sales, but uptick in ecommerce
JOANN’S 2024 third quarter fiscal results became available a few weeks ago on the company’s website.
- JOANN lost $21.6 million, or 51 cents a share, in the quarter, compared with a loss of $17.5 million, or 43 cents a share, in the year-ago quarter.
- Sales fell 4.1% to $539.8 million. Same-store sales also dropped 4.1%, including a jump of 11.5% for e-commerce sales.
- Long-term net debt was $1,148.2 million as of October 28, 2023.
“With continued progress and strong execution against our strategic priorities, we were pleased with our third quarter results in what remains a dynamic consumer environment. Loyal customers are engaging with us at a greater rate,” said JOANN Chief Customer Officer and co-interim Chief Executive Chris DiTullio. “Our e-commerce performance was particularly strong with double digit quarter growth as we delivered a better and faster consumer experience, and benefitted from site enhancements driving increased conversion,” he added, crediting social media initiatives like #GETTINGKNOTTY, which attempted to reach younger audiences with the tie-knot blanket trend.
“In light of the uncertain consumer environment, we are working to manage all aspects of the business prudently while leveraging our read and react capabilities through advanced data analytics to control what we can control and capitalize on new opportunities as they arise,” said JOANN Chief Financial Officer and co-lead of the Interim Office of the CEO Scott Sekella.
JOANN has been without a CEO since May, when Wade Miquelon retired.
Corridor locations remain open, no word on future
JOANN Fabric and Craft opened a 25,000 square-foot store in 2017 in the Iowa City Marketplace at 1676 Sycamore St. and has recently slashed its operating hours from 11 a.m. – 4 p.m. According to a store employee, the reduced hours are a result of the manager and assistant manager leaving their positions simultaneously. A sign affixed to the front entrance is advertising part-time positions.
According to a store manager at the Cedar Rapids Lindale Mall location, 255 Collins Rd. NE, no information has been released about the status of chain locations and they declined to comment further.
