Joann beefs up liquidity ahead of releasing Q4 earnings

Joann Inc. announced it has entered into a $100 million first-in-last -out (FILO) facility.

The arts-and-crafts retailer said the facility will provide the company with additional liquidity, help optimize the balance sheet, and drive free cash flow across the enterprise. The proceeds from the FILO Facility will be used, in addition to cash on hand, to repay a portion of its existing $500 million asset-based revolving loan facility.

Joann has struggled in recent quarters amid inflation concerns and as consumers returned to restaurants, events and other activities. For its third quarter, ended Oct. 29, Joann’s net sales fell 7.9% to $562.8 million, with comp sales down 8%. The company swung to a net loss of $17.5 million compared to net income of $22.8 million in the year-ago quarter. Its cash and cash equivalents totaled $27.5 million, compared to $30.9 million a year ago.

“It’s clear that consumers are increasingly pressured by inflation and are being more selective with their purchases in the current holiday season, prioritizing household essentials over many discretionary activities,” stated CEO Wade Miquelon in the third-quarter release. “As an organization, we are taking very meaningful and pro-active steps to optimize our cost structure while continuing to drive multiple growth strategies.”

Joann, which operates 840 stores across 49 states, will release its fourth quarter earnings after the market closes on March 23.