Burlington snags 45 of Joann’s store leases out of bankruptcy

Dive Brief:

Through the craft retailer’s bankruptcy, Burlington will assume the leases of 45 Joann store locations, according to a court filing on Monday.
Burlington will take over the leases in May and June, with locations across the country in states such as California and Texas. 
The proposed cure amounts (typically the amount needed to make good on a defaulted loan or contract) for the locations range from $0 to over $50,000, and a few other locations will be taken over by companies including Hobby Lobby and Boot Barn.

Dive Insight:

Joann’s decision in February to shutter all of its stores marks an opportunity for some companies looking to grow their footprint. 

“Our recent conversations with real estate contacts suggest very little new shopping center growth is planned in the US for the foreseeable future — meaning chains with high store growth ambitions, like [Burlington], will need to be aggressively going after locations from retail bankruptcies along the way,” Evercore ISI analysts said in an emailed note Tuesday.

Joann went through two bankruptcies in about 10 months, with its lenders and GA Group most recently winning a bankruptcy auction and initiating going-out-of-business sales at all locations. The retailer first filed bankruptcy in March 2024 with plans to reduce debt by about $500 million. 

A well-known arts and crafts retailer in business for about 82 years, Joann’s closure will push consumers to rivals. A Numerator survey released in February found that respondents said they would now shop for those products at Michaels and Hobby Lobby, as well as online companies and mass retailers such as Walmart. Additionally, 80% of respondents said they were upset by Joann’s closures.

Burlington’s move to take on these leases comes as the off-price retailer chases growth. The company’s CEO, Michael O’Sullivan, in March said it opened 101 net new stores in 2024 and relocated 31 older, oversized locations, according to a company press release. In its fourth quarter, Burlington’s net sales rose 4.8% year over year to almost $3.3 billion, and net income soared 14.6% to $260.8 million.

The executive added, however, that while the “outlook for 2025 is very uncertain,” such tumultuous economic environments are where the off-price model can perform best. 

While the retail industry deals with rapidly shifting global trade dynamics, off-price companies such as Burlington, TJX and Ross Stores could see hits to their customer bases because of new immigration policies in the U.S.