JOANN fabric company files for bankruptcy

March 18 (UPI) -- The fabric and craft company JOANN announced Monday that it was declaring bankruptcy and taking in an infusion of new money to restructure and continue operating normally.

The Ohio-based company said it was taking "a significant step forward to strengthen our financial position" in its Chapter 11 filing.

"It will provide us with the financial resources and flexibility necessary to continue to deliver best-in-class product assortments and enhance the customer experience wherever they are shopping with us," Scott Sekella, chief financial officer and co-interim CEO, said in a statement.

As part of the process, JOANN will have its stock delisted from the New York Stock Exchange to become a privately held entity as soon as April, and reduce debt by more than $500 million to address a billion-dollar deficit with nearly $132 in new financing.

While more than 800 stores nationwide will be affected, JOANN said despite the financial restructuring 95% of those stores currently have a positive cash flow and customers may continue to shop online.

A retail analyst expert told CNN that JOANN's bankruptcy "has been looming for a long time and was always a matter of when, rather than if."

While the impending bankruptcy and restructure of the 80-year-old fabric and sewing company will give JOANN a chance to streamline operations and reduce debt, "weakening store standards and declining customer service levels, partly because of staffing cuts, have made stores less desirable," Neil Saunders, GlobalData's managing director said Monday.