As of now, discussions are ongoing, and final plans have not been solidified. The company is actively working towards garnering enough support from its lenders, potentially enabling a swift exit from Chapter 11 bankruptcy through a pre-pack filing. Chapter 11 allows a company to continue its operations while devising a plan to settle debts with creditors.
Despite attempts to reach out to Joann for comments beyond regular business hours, there hasn't been an immediate response from their representative.
Joann has been grappling with liquidity issues and the management of inventory levels, facing the complexities of the current retail environment. In January, it successfully raised over $34 million through a sale and leaseback deal for its Hudson, Ohio facility. However, the company is still dealing with substantial interest expenses and obligatory term loan payments, as noted by Moody's Investors Service.
For advisory support, Joann has engaged with Houlihan Lokey Inc., while a group of lenders has sought assistance from Lazard Inc. and Gibson Dunn & Crutcher, as reported by Bloomberg News earlier.
Representatives from Houlihan Lokey and Gibson Dunn have yet to comment, while a spokesperson from Lazard declined to provide any remarks.
Data compiled by Bloomberg reveals that Joann's term loan due in 2028 is currently valued at less than 10 cents on the dollar. Over the past year, the company's shares have experienced an 85% decline, closing at around 51 cents on Friday.
Joann is just one of many retailers currently scrambling to bolster their finances in the face of recent challenges. The Children’s Place Inc. secured new financing from Mithaq Capital, and Express Inc. is in talks with lenders regarding restructuring options. Additionally, Big Lots Inc., an off-price home retailer, is actively seeking fresh cash to navigate the economic landscape.