JoAnn-"restructuring"

[BillyGr]

Their employees are not supervising well, and many customers don't understand retail. So, they think that if they are buying a dozen different colors of paint and they are all 99¢ they can just scan one twelve times. But now the inventory level will be short on 11 out of those 12 items. You can see how this could quickly deplete the store inventory, interfere with pickup and ship from store orders and so on. Self-checkout does not belong in complicated stores like this.

The employees can be just as bad - I remember ShopRite here having to lock out the option for cashiers to ring up quantities on some items when they did the Can Can sales, as they would do the same thing with their 12 cans for $x case type sale, just punching 12x one can, even when the customer had 4 each of 3 items.

Price not an issue (as it was mix/match) but the inventory was as you say.

I am not sure I've ever seen a self-checkout before that had this odd set up where the bags are sitting on a rack next to the self-checkout but just as high as the self-checkout machine, so the customer has to lift every item up into the bag (as opposed to dropping it into the bag after scanning).

Not exactly that, but I've seen ones with a bag lower and a second bag higher (basically two small, narrow scale panels one above the other) - of course no longer with actual bags, but designed to fit one rack or now reusable each.

They could also cause the self-checkout to lock up if someone scans the same item too many times. They could even program in the limitation on specific problem SKUs like the paints. I've seen that done at some grocery stores on produce PLUs. Enter PLU 4011 4 times in a transaction and it'll lock up.

That could work, but then causes an issue if someone actually wants to buy multiple of the same item (I could see them doing that if, for instance, they had a group of kids doing a project where each gets a bottle of the color(s) being used).

[buckguy]

JoAnn moving toward bankruptcy: https://www.beaconjournal.com/story/new ... 837919007/

[ClownLoach]

JoAnn moving toward bankruptcy: https://www.beaconjournal.com/story/new ... 837919007/

Identical plan to Rite Aid.

The lenders take over the company in lieu of repayment, and the shareholders lose everything.

Prepackaged bankruptcy to shed debt.

I think this is a good idea if they take the opportunity to really clean house of the dumpy old stores as well as the few remaining "too big to be profitable" megastore format locations. They need to clean up their fleet of stores and probably get their count down to the 500-600 range... That would mean a couple hundred closures.

They were still opening luxurious new stores last month in the high rent district of Laguna Niguel, so they obviously aren't out of money. In SoCal they have had great success closing three small formats in a decent size geographic area and consolidating to a single, larger, centrally located new format store. That should be their strategy... Fewer stores in a better format with less overhead. With so many stores in the right size range closing (Staples, Office Depot, older PetSmart, Michaels, and others) they should be able to get rid of all the old format stores in the next few years. But that won't be possible without cleaned up books and improved credit, hence this bankruptcy.

[storewanderer]

They need to replace stores... Reno Store is horrendous. But closing it would be a complete market exit. The store has traffic so a market exit makes no sense but a relocation sure does.

Business is booming at Hobby Lobby. Pretty busy at Michaels... not as busy as it once was.

[ClownLoach]

I posted under Rite Aid as well, but based on the available information about the proposed bankruptcy with fast turnaround... I am seriously wondering if the sign walkers being hired for an event starting March 20 are for JoAnn closures.

Their Reddit board has employees mentioning their stores are being told their trucks are canceled until after Easter and they're running out of product.

The bankruptcy reports indicate that it will be a fast filing similar to David's Bridal. Most likely a Saturday or Sunday filing and then only one week in court before an exit. They supposedly have all plans lined up and it will be a debt for equity swap that wipes the shareholders out and pays off the debt. And there will be store closures.

If they have their entire plan already booked, and they know the stores to close or markets exiting, then the timeline of what is supposedly going to be happening at JoAnn would put liquidation sales starting March 20. And the fact they self liquidate stores aligns with this Craigslist hiring stuff since real liquidators use Labor Ready. Probably the District Managers themselves on the line or a hired liquidation consultant.

The timing matches perfectly.

[storewanderer]

I posted under Rite Aid as well, but based on the available information about the proposed bankruptcy with fast turnaround... I am seriously wondering if the sign walkers being hired for an event starting March 20 are for JoAnn closures.

Their Reddit board has employees mentioning their stores are being told their trucks are canceled until after Easter and they're running out of product.

The bankruptcy reports indicate that it will be a fast filing similar to David's Bridal. Most likely a Saturday or Sunday filing and then only one week in court before an exit. They supposedly have all plans lined up and it will be a debt for equity swap that wipes the shareholders out and pays off the debt. And there will be store closures.

If they have their entire plan already booked, and they know the stores to close or markets exiting, then the timeline of what is supposedly going to be happening at JoAnn would put liquidation sales starting March 20. And the fact they self liquidate stores aligns with this Craigslist hiring stuff since real liquidators use Labor Ready. Probably the District Managers themselves on the line or a hired liquidation consultant.

The timing matches perfectly.

If they can do a quick bankruptcy and get it over with that will be fantastic. Rite Aid is lighting cash on fire with its extended bankruptcy process that feels like it is going nowhere and I am noticing stores are having inventory issues again. A quick in and out for JoAnn will help them greatly.

[mbz321]

They have officially filed Chapter 11
https://www.cnn.com/2024/03/18/business ... index.html

[ClownLoach]

https://www.retaildive.com/news/joann-c ... ail%20Dive

Says they will be done with the bankruptcy next month and exit as a private company. Textbook prepackaged bankruptcy deal that swaps debt for equity. Shareholders wiped out, but that really had already happened based on the stock price.

No mention of store closures and they say all are remaining open. That is where I see a mistake here, I would have taken the opportunity to purge the fleet of dingy, dirty old obsolete stores that look like a fabric oriented Kmart. Also would have closed the mega warehouse size stores that are larger than Hobby Lobby and they can't find enough merchandise to fill them or spend enough on labor to maintain them. They will never be successful long term if they don't get rid of the old, dated stores and the giant mega warehouse stores. They have had limited success in downsizing those, they did sublease a third of a mega warehouse format to Ulta Beauty in Temecula and the store is still too big for them to handle. If it closed and Hobby Lobby moved over they wouldn't even use all that space. I really wonder if the costs of the oversized stores sap so much cash that they can't afford to do anything with the old, undersized stores.

But then it might be a calculated risk. If there are no store closing announcements and they can quickly broadcast the successful end of bankruptcy, is that better public image for the long term results of the company versus a prolonged store purge as we are seeing at Rite Aid?

If this is successful, I wonder if Michaels will be the next to go through the process to shed debt? Allegedly they have $4 billion and growing... Joann collapsed under $1 billion. Probably explains why Michaels is doing so badly.

[ClownLoach]

Unfortunately, due to being a slow news day, this Joann bankruptcy is getting a ton of news coverage. Probably not what they wanted or needed. There are too many ignorant customers who do not understand how bankruptcy works. They will think the chain is liquidating and stop shopping while they wait for a sale.

[bayford]

Unfortunately, due to being a slow news day, this Joann bankruptcy is getting a ton of news coverage. Probably not what they wanted or needed. There are too many ignorant customers who do not understand how bankruptcy works. They will think the chain is liquidating and stop shopping while they wait for a sale.

Yep, I've seen a handful of people in my social media feeds today reacting to the news by mentioning how they are going to miss JoAnn or "at least Michaels and Hobby Lobby will still be around."