POPULAR arts and crafts retailer JOANN is fighting to stay afloat just months after landing on a bankruptcy watchlist at the end of last year.
The rival to fellow crafts retailer Hobby Lobby announced that it entered into a $100 million first-in last-out (FILO) facility on Monday.
The move is expected to “provide the company additional liquidity, help optimize the balance sheet, and drive free cash flow across the enterprise,” JOANN said in a news release.
On March 10, JOANN officially borrowed $100 million from the FILO facility in order to pay off a portion of the company’s existing $500 million asset based revolving loan (ABL) facility.
It will also cover “transaction costs.”
The move comes just months after the arts and crafts retailer ended up on Retail Dive’s 2022 bankruptcy watch list, along with retailers like Tuesday Morning and Party City – both of which have already filed for bankruptcy this year.
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JOANN is set to release its fourth quarter fiscal earnings next week.
In December, the company reported a 7.9% decline in sales during the third quarter, according to Retail Dive.
It was not immediately clear if JOANN is preparing for a similar decline, however in January the company moved to close several locations nationwide.
Specifically, the retailer shuttered doors for stores in Batavia, New York; Marion, Ohio; Huntington Beach, California; and Cockeysville, Maryland; Sault Sainte Marie, Michigan; Bridgeport, West Virginia; Brockton, Massachusetts; and Keene, New Hampshire.
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At the time JOANN claimed the closures were part of the company’s “normal business evaluation process.”
"In alignment with standard brick and mortar business processes, JOANN closes stores occasionally while simultaneously investing in, and opening brand new stores to best meet the needs of our customers," a statement read.
Despite any concerns, the company insisted they are “not going out of business or having any mass store closures.”
JOANN told The U.S. Sun in January that it does not plan on closing all physical stores and will continue to "unveil new stores with updated features and offerings in 2023."
JOANN operates approximately 850 locations across 49 different states and has been in business since 1943.
