A popular craft store with numerous locations across Minnesota is facing some challenging financial times, declaring bankruptcy for the second time within a year.

Joann Fabrics, which has been around for over 80 years, has been combatting difficult financial times lately, originally filing for Chapter 11 bankruptcy protection in March of 2024. CNN is reporting the company just filed for bankruptcy again to start 2025.

Here's what's going on and what is next for the stores.

Why is Joann Fabrics filing for bankruptcy for a second time?

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In a story about their initial bankruptcy filing, it was reported that the company was facing difficult financial headwinds in the face of consumers "cutting back on discretionary spending".

While Joann Fabrics enjoyed a bit of a boost during the pandemic as people spent more time at home, focusing on hobbies or learning new ones, that boon quickly faded.

After the bankruptcy filing last year, the company restructured and came out of bankruptcy a month later while managing to keep all of its stores open in the process.

The company currently operates 21 stores in Minnesota, including a handful of Twin Cities locations, Duluth, Rochester, and relatively smaller communities like Hibbing, Bemidji, Brainerd, and Fairbault, where craft store supply options are already limited.

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CNN reports the second bankruptcy filing just made public today (January 15) was spurred on by continued slow sales and inventory issues, much like other retailers across the country have been dealing with.

The inventory issues, which were "acute and unexpected" led to stores not being able to get the products customers were coming into stores to get, having significant impacts on their sales.

What's next for Joann Fabrics?

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This time around, the company is looking to sell off to a new owner. CNN reports Gordon Brothers Retail Partners, who recently bought a significant amount of the retailer Big Lots, is currently looking to buy Joann.

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If that happens, CNN is told it is quite possible Gordon Brothers would hold going-out-of-business sales and lay off employees. That said, the company is entertaining other offers which, in turn, could lead to potentially different outcomes.

In the meantime, the company plans to keep all of their stores and website open and employees will continue to get paid as they await a buyer.

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