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Joann ends gift card redemption amid store closures in Michigan. What's happening now

Joann ends gift card redemption amid store closures in Michigan. What's happening now

  • 14.03.2025 16:00
  • eu.usatoday.com
  • Keywords: bankruptcy, store closures

Joann Fabrics is closing 41 Michigan stores after filing for bankruptcy a second time, ceasing gift card acceptance as part of its going-out-of-business sales, leaving customers disappointed.

Meta News

Estimated market influence

Joann Fabrics

Negativesentiment_dissatisfied
Analyst rating: N/A

The company is closing its stores and redeeming gift cards amid bankruptcy.

GA Group

Positivesentiment_satisfied
Analyst rating: N/A

Acquired Joann's assets and plans to wind down operations.

Context

Analysis and Summary: Joann Fabrics Store Closures and Gift Card Redemption Discontinuation

Business Impact

  • Second Bankruptcy Filing: Joann Fabrics filed for Chapter 11 bankruptcy for the second time in a year, leading to store closures.
  • Store Closure Plan: Initially planned to close 41 stores, but later decided to close all 850 locations after being acquired by GA Group.
  • Gift Card Redemption Discontinuation: Gift cards were accepted only until February 28, 2025, affecting customers who missed the redemption window.

Market Trends

  • Declining Retail Sector: The closure reflects broader challenges in the retail sector, particularly for arts and crafts stores facing competition from online platforms.
  • Going-Out-of-Business Sales: Stores conducted liquidation sales starting February 15, 2025, with discounts of up to 80%, an increase from previous 60% discounts.

Competitive Landscape

  • Shift in Consumer Behavior: The closure may indicate a long-term decline in demand for physical arts and crafts stores as consumers转向online platforms or big-box retailers.
  • Strategic Liquidation: GA Group’s decision to wind down operations suggests a strategic focus on maximizing asset value through liquidation rather than operational turnaround.

Geographic Focus

  • Michigan Locations: 41 stores across 40 towns in Michigan were affected, including major cities like Ann Arbor, Detroit suburbs, and Grand Rapids.
  • Store List: Specific locations and addresses were provided for each closed store (see full list in the source text).

Customer and Employee Impact

  • Customer Complaints: Customers expressed frustration over the abrupt discontinuation of gift card redemptions, questioning why prepaid cards could not be honored.
  • Employee Layoffs: The closure affects thousands of employees, with no plans for store reopenings under new ownership.

Strategic Considerations

  • Supply Chain Implications: Liquidation sales may disrupt the company’s supply chain and vendor relationships as inventory is cleared rapidly.
  • Brand Reputation: The abrupt closure and gift card policy have likely damaged Joann Fabrics’ brand reputation among loyal customers.

Long-Term Effects

  • Market Shrinkage: The exit of Joann Fabrics may reduce competition for online arts and crafts retailers but could also limit access to crafting supplies for hobbyists in affected regions.
  • Regulatory Impact: While not explicitly mentioned, workforce reductions and store closures may trigger local economic or labor market regulatory reviews.

Key Metrics

  • Discounts Offered: Up to 80% during liquidation sales (previously up to 60%).
  • Redemption Deadline: February 28, 2025, for gift cards.
  • Store Closure Timeline: Stores remain open until May 31, 2025, for final clearance.

Conclusion

Joann Fabrics’ second bankruptcy and store closures highlight the challenges faced by traditional retail in adapting to changing consumer preferences and market dynamics. The abrupt discontinuation of gift card redemptions and aggressive liquidation sales signal a strategic shift toward maximizing short-term value rather than long-term viability. Competitors may see opportunities to expand their market share as Joann exits key regions like Michigan.