Is This The End For JOANN Fabric In North Dakota And The US?

In shocking news, a fan favorite among crafters that has four locations across North Dakota may be on shaky ground and run the risk of going under completely.

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According to the Corridor Business Journal, due to declining sales and significant debt, Joann Fabric recently received the worst possible CreditRiskMonitor FRISK score of 1, putting its finances in jeopardy.

Experts caution that JOANN Inc., better known as Joann Fabrics, had a dismal fiscal year, which may be a sign of imminent insolvency. A difficult year for well-known box store chains was 2023.

A number of retailers, including CVS and Express, closed locations and laid off employees in an effort to save money, while Bed, Bath & Beyond, Tuesday Morning, and Christmas Tree Shop filed for bankruptcy and closed their doors.

After a thorough investigation by financial information firm CreditRiskMonitor of a number of other well-known merchants, it was discovered that 11 businesses, including Joann, had a higher than average chance of declaring bankruptcy in the upcoming year.

A company with a FRISK score of 1 has historically had a 10% to 50% chance of going bankrupt. A 96% accurate FRISK score, which is based on the likelihood of bankruptcy during a 12-month period, indicates the level of financial stress a company is experiencing.

Fiscal 2024 third-quarter numbers show a decline in sales but an increase in e-commerce. A few weeks ago, the company's website made available JOANN'S fiscal data for the third quarter of 2024. JOANN's loss for the quarter was $21.6 million, or 51 cents per share, as opposed to $17.5 million, or 43 cents per share, for the same period last year.

Sales at $539.8 million decreased by 4.1%. Additionally, same-store sales decreased by 4.1%, with an 11.5% increase in e-commerce sales. As of October 28, 2023, long-term net debt was $1,148.2 million.

"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. “We are seeing more engagement from loyal customers,” JOANN Chief Customer Officer and co-interim Chief Executive Chris DiTullio stated.

"We delivered a better and faster consumer experience and benefited from site enhancements driving increased conversion, which led to a particularly strong e-commerce performance with double-digit quarter growth," he continued, giving credit to social media initiatives like #GETTINGKNOTTY, which aimed to reach younger audiences with the tie-knot blanket trend.

"We are working to manage all aspects of the business prudently in light of the uncertain consumer environment, 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," stated Scott Sekella, co-lead of the interim office of the CEO and JOANN Chief Financial Officer.

Wade Miquelon's retirement in May left JOANN without a CEO.