- Lenders are holding confidential discussions with the firm
- Company’s term loan due 2028 trades around mid-single digits
Joann Inc. is having confidential discussions with its lenders as it seeks fresh capital to bolster its cash reserves, according to people familiar with the matter.
A cash infusion could help the fabric and crafts retailer circumvent a potential Chapter 11 filing, said some of the sources, who asked not to be identified discussing a private matter. Negotiations are ongoing and terms of a deal have not been finalized, they said.
A representative for Joann didn’t respond to requests for comment.
The company has been trying to stay liquid and manage inventory levels amid a challenging environment for retailers. It disclosed a sale and leaseback transaction for its Hudson, Ohio facility for $34.5 million in December. Joann had $28.3 million of cash and $72.1 million of availability on its asset-based facility after netting out $406.5 million in borrowings and $21.4 million in letters of credit for the third-quarter that ended Oct. 28, according to regulatory filings. It listed around $1.148 billion of long-term debt.
Joann has been working with Houlihan Lokey for advice, while a group of lenders retained Gibson Dunn & Crutcher. Lenders have also hired