SOUTH BURLINGTON, Vt. (WCAX) – Fabric and crafts retailer Joann filed chapter 11 bankruptcy, which means they are proposing a plan of reorganization to keep the business alive and pay creditors over time.
According to St. Michael’s Business Administration and Accounting Professor Robert Letvosky, only some locations throughout the U.S. will permanently close. He said he’s not sure if this location in South Burlington will remain open.
Some local crafters in the Green Mountain state aren’t too happy about the potential closure.
“I am shocked first of all because I was just there 3 times last week,” Shelburne resident Carol Parven Hutter said.
Hutter, who works in the arts and crafts field, says she’d be disappointed if this location does close since she prefers to get her supplies in-person rather than online.
“Having a person that knows something is very helpful. YouTube works but a person really looking at you and you can ask the real question is where it’s at,” Hutter said.
Letvosky says in 2021 – Joann was paying out an interest about $69 million per year – that has gone up almost 50 percent. The craft store has $102 million a year just in interest expenses.
“So here you’ve got a company that had a fair bit of debt, and the interest expenses go through the roof so on the expense side, they were hurt that way. They’re going to come out of it and save, they’re going to eliminate frankly probably up to 500 million in debt and they’ll come out of this ultimately perhaps with few stores,” Letvosky said.
Since 2021, the revenue decreased by 22 percent. Joann will likely become privately owned by certain lenders and industry parties — meaning its shares would no longer be publicly traded on stock exchanges.
“I think over the long term, they could survive but I think the number I had seen is they might be cutting as much as 300 million in debt,” Letvosky said.