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Crafts retailer Joann (NASDAQ:JOAN) could file for bankruptcy as soon as next week, Bloomberg News reported on Saturday, citing people with knowledge of the matter.
The filing would be part of a deal that would hand the reins over to Joann’s (JOAN) lenders and allow it to shed debt, Bloomberg said, adding that it had been holding confidential talks with its lenders.
Joann (JOAN) did not immediately respond to Seeking Alpha’s request for comment.
Hudson, Ohio-based Joann (JOAN) provides products and services such as cotton fabric, yarn and needle arts, garden and outdoor decor, and sewing machines. The company runs 829 store locations across 49 U.S. states.
Bloomberg News last month had reported that Joann (JOAN) was holding talks with lenders.
The company in its most recent quarterly report delivered a 4.1% decline in both net sales and comparable sales, hurt in part by the pull forward of its Halloween assortment of items. Top boss Christopher DiTullio had also pointed to basket pressure due to fewer items per transaction and a lack of customers stocking up.
The bankruptcy discussions with the lenders are ongoing and the plans are not final, but the company is looking to line up enough fresh capital that would allow it to exit chapter 11 quickly in what is known as a pre-pack filing, Bloomberg said, citing the people with knowledge of the matter.
Joann (JOAN) stock last closed +1.5% at $0.51 on Friday.
