Stock Decline and Cash Infusion Talks
Following reports of discussions with lenders to bolster its cash reserves, crafts retailer Joann Inc. (NASDAQ:JOAN) experienced a sharp 5.6% decline in after-hours trading.
An infusion of capital from lenders is seen as potentially staving off bankruptcy for the company, a Bloomberg report suggested on Wednesday. Citing sources familiar with the matter, the report indicated ongoing talks with no finalized deal terms.
Joann’s (JOAN) shares took a substantial 35% hit on December 5 after reporting Q3 sales that failed to meet estimates and a wider-than-expected adjusted loss. The stock has spiraled down by 83% over the past year.
Industry Struggles
Joann’s discussions are not isolated, as other retailers face similar financial challenges. Big Lots (BIG) was reported by Bloomberg last week to be seeking new financing to address dwindling liquidity, while Children’s Place (PLCE) is in the process of securing new financing with the help of advisors. The Wall Street Journal revealed on Monday that apparel retailer Express (EXPR) is gearing up for a debt restructuring.