Joann is closing 500 stores, including its Altoona — Joann Fabrics — location, as the company navigates through bankruptcy.

The company said more than 30 stores in Pennsylvania are closing. In addition to the 3415 Pleasant Valley Blvd. location, the Joann locations along Benner Pike in State College and along Scalp Avenue in Johnstown are closing. That will leave only 300 Joann locations open nationwide.

The news follows an announcement in December that after filing for Chapter 11 bankruptcy protection and closing hundreds of stores, Big Lots is preparing to close all of its locations, including the stores at 415 Orchard Ave., Altoona, and 503 Benner Pike, State College.

These closures reflect a trend seen in larger, national brand retailers, said President/CEO Stephen McKnight of the Blair County Alliance for Business and Economic Growth.

Big Lots! at 415 Orchard Ave. will soon be closing following a bankruptcy filing. Mirror photo by Patrick Waksmunski

“Online sales continue to put pressure on big box stores to rethink their approach, which can lead to downsizing,” McKnight said. “But we continue to see interest in smaller boutique and specialty retailers like Wildfire Clothing in Downtown Altoona and Lightning Bug Gifts in Hollidaysburg. These smaller, more unique businesses are taking advantage of both online and walk-in sales with less overhead.”

Joann first filed for Chapter 11 bankruptcy protection in March 2024, but was able to stay afloat after becoming a private company.

In January, the company filed for Chapter 11 again, and now said it is closing about 500 underperforming stores as it looks to sell the business.

“This was a very difficult decision to make, given the major impact we know it will have on our Team Members, our customers and all of the communities we serve,” the company said in a statement sent to The Associated Press. “(But) right-sizing our store footprint is a critical part of our efforts to ensure the best path forward.”

The exact closing dates of the stores and how many employees will be affected is unknown, as a motion filed Wednesday seeks the court’s permission to begin the process of closing stores.

Joann’s roots date back to 1943, with a single storefront in Cleveland, Ohio. The retailer later grew into a national chain. Formerly known as Jo-Ann Fabric and Craft Stores, the company rebranded itself with the shortened “Joann” name for its 75th anniversary.

Both of Joann’s bankruptcy filings seen over the last year arrived amid some slowdowns in discretionary spending — notably with consumers taking a step back from at-home crafts, at least relative to the early COVID-19 pandemic boom. Joann has also faced rising competition in the crafts space from rivals like Hobby Lobby, as well as from larger retailers, like Target, who now offer ample art supplies and kits.

While Joann turned to implementing a new business plan after emerging from bankruptcy last spring, “unanticipated inventory challenges post-emergence, coupled with the prolonged impact of an excessively sluggish retail economy, put (Joann) back into an untenable debt position,” interim CEO Michael Prendergast noted in a sworn court declaration filed when Joann initiated its latest Chapter 11 proceedings on Jan. 15.

Prendergast explained that inventory shortages had significant ripple effects on Joann’s core business, particularly when “in-stock levels eventually dropped by upwards of 10%” and led to a “new phase of operational distress.”

Citing these and other macroeconomic challenges seen in the retail space over recent years, Joann has maintained that a sale of the business is the best path forward. The company says it has a proposed “stalking horse” bid agreement with Gordon Brothers Retail Partners.