Joann Fabric & Crafts Credit Rating & NNN Status

Metric	Details
Entity Status	Liquidated — Second Chapter 11 January 2025
First Chapter 11	March 2023 (reorganized, emerged July 2023)
Second Chapter 11	January 15, 2025 (liquidation)
All Stores Closed	~800 locations closed by mid-2025
Brand Status	Online-only acquisition under evaluation
Pre-Bankruptcy S&P / Moody’s	B / B2 (first filing); CCC / Caa2 (second filing)
Investment Grade Status	Liquidated — No longer a NNN tenant
Former Typical Building Size	10,000–20,000 SF

What Happened to Joann?

Joann Inc. — the fabric and crafts retailer operating under the JOANN brand — became one of the most high-profile double-bankruptcy cases in modern retail history. The company filed Chapter 11 for the first time in March 2023, emerging from bankruptcy in July 2023 with a restructured balance sheet and approximately $500 million in debt eliminated. However, the operational challenges that drove the first filing were never resolved: a highly promotional business model, post-COVID normalization of craft demand that had surged during lockdowns, and an inability to generate consistent free cash flow in a competitive market against Hobby Lobby and Michaels.

On January 15, 2025, Joann filed Chapter 11 for the second time. This filing moved quickly to liquidation — all approximately 800 stores were closed and inventory liquidated by mid-2025. The double-bankruptcy outcome underscores the risk of non-investment grade retail tenants even after a first-round restructuring: reorganization can eliminate debt, but it cannot fix a fundamentally challenged business model.

The Joann Credit Warning Story

Double-Bankruptcy Case Study: Joann’s path from B/B2 at the first filing to CCC/Caa2 before the second filing illustrates the critical importance of continuous credit rating monitoring for NNN investors. Investors who held Joann leases through the first bankruptcy reorganization in 2023 received reduced rent or restructured lease terms — and then faced full lease rejection in the second filing. The two-year window between filings gave investors who monitored credit trends time to dispose of or hedge their exposure before the final liquidation.

Joann’s competitive position was structurally challenged. Hobby Lobby — a privately owned competitor with no public debt, low leverage, and disciplined expansion — consistently outperformed Joann on merchandise quality and customer experience. Michaels, backed by Apollo Global Management, had greater scale and supply chain advantages. Joann’s heavily promotional model generated sales volume but not profit. The pandemic-era crafting surge was a one-time tailwind that masked the underlying deterioration — when demand normalized, the structural problems re-emerged with full force.

Former Joann Properties: Re-Tenanting Considerations

The 10,000 to 20,000 square foot Joann format — typically in strip centers and power centers — is one of the most re-tenantable sizes in the retail market. This format size accommodates a wide range of replacement users including specialty retail, fitness concepts, healthcare walk-in clinics, beauty and personal services, food and beverage, and discount concepts. Unlike the 100,000+ square foot department store format, former Joann boxes typically find replacement tenants relatively quickly in active retail markets.

Key Re-Tenanting Options for Former Joann Spaces

Replacement Category	Format Fit	Credit Quality
Hobby Lobby (direct craft replacement)	Good — but prefers 55–60K SF	Private / strong
Five Below (value variety)	Excellent — 10–15K SF ideal	Private / NR
Planet Fitness (fitness)	Good — 15–20K SF fits well	BBB‑/B3
Urgent care / medical	Good — 10–15K SF standard	Often IG health systems
Beauty / personal services	Good — divisible into multiple units	Varies
Discount grocer (Aldi, Lidl)	Good in grocery-underserved markets	Private / strong

Did Joann go out of business?

Yes. Joann filed Chapter 11 for the second time on January 15, 2025, and subsequently liquidated all approximately 800 US stores. The double-bankruptcy outcome resulted in complete closure of the physical retail chain. The brand may continue in some form online, but all Joann physical stores are permanently closed.

What happened to NNN investors who owned Joann properties?

Joann’s second bankruptcy filing resulted in rejection of all remaining store leases. Property owners became unsecured creditors for any remaining lease obligations and received their properties back vacant. The 10,000 to 20,000 SF strip and power center format is highly re-tenantable with fitness, healthcare, value retail, and beauty concepts.

Own a Former Joann Property? We Can Help.

Former Joann spaces in strip and power centers are some of the most re-tenantable boxes in retail. Whether you need re-tenanting advisory, want to sell the property, or need to exchange into quality investment-grade NNN, we handle all three.

Re-tenanting — We identify the right replacement tenant category based on your center, market, and co-tenancy.

1031 Exchange — Selling a former Joann property and need to identify a replacement asset? We specialize in time-sensitive 1031 buyer representation into investment grade NNN.

Talk to a Retail NNN Specialist →

In a 1031 exchange with a deadline? Tell us your timeline — we move faster.

Related NNN Tenants

Own multiple Joann Fabric & Crafts properties? Considering an off-market sale?

Investment Grade represents owners on confidential disposition of Joann Fabric & Crafts portfolios and individual properties through off-market direct-to-principal distribution to specialty REITs, private equity funds, and family offices. Joann Fabric & Crafts buyer demand runs deep, and portfolio sales consistently produce stronger pricing than sequential individual sales because the institutional buyer pool is structured around portfolio acquisition.

For multi-property owners considering a portfolio disposition, see Selling Investment Grade NNN Off-Market: Tenant-by-Tenant Buyer Demand. For the full off-market framework covering individual property dispositions, sale-leasebacks, and 1031 coordination, see Off-Market CRE Sales: The Complete 2026 Guide.

The pre-listing conversation is at no cost and fully confidential. Email team@investmentgrade.com or see contact Investment Grade.