Crafts retailer Joann Inc. is considering a bankruptcy filing as soon as next week as part of a deal that would hand control of the company to lenders while allowing it to shed expensive debt, Bloomberg News reported. The company, which sells fabric and craft supplies and has around 850 stores in the U.S., has been holding confidential talks with its lenders as it seeks fresh capital to bolster its cash reserves. Discussions are ongoing and plans aren’t final, but the company is seeking to line up enough support from lenders that would allow it to exit chapter 11 quickly in what’s known as a pre-pack filing. Joann has struggled to maintain liquidity and manage inventory levels amid a challenging environment for retailers. It raised more than $34 million in a sale and leaseback deal for its Hudson, Ohio facility, but is contending with high interest expenses and required term loan payments, Moody’s Investors Service wrote in a note in January.
