Burlington obtains 45 leases of Joann stores from bankruptcy proceedings
In a significant move for the off-price retail sector, Burlington has announced it will be taking over the leases of 45 Joann store locations, starting from May and June. The update to this story was made to indicate Dani James as the author.
The decision comes as Joann, a popular arts and crafts retailer, announced its intention to shutter all of its stores in February. Consumers looking for arts and crafts products will now have the option to shop at Michaels, Hobby Lobby, online companies, mass retailers like Walmart, or even the new Joann stores operated by Hobby Lobby and Boot Barn.
The off-price model, including Burlington, TJX, and Ross Stores, could potentially be affected by new immigration policies in the U.S., as suggested by Evercore ISI analysts. However, Burlington's CEO, Michael O'Sullivan, believes that the off-price model performs best in tumultuous economic environments.
The news of Burlington's expansion comes after a successful fourth quarter. The company's net sales rose 4.8% year over year to almost $3.3 billion, and net income soared 14.6% to $260.8 million. Burlington opened 101 net new stores in 2024 and relocated 31 older, oversized locations.
However, the outlook for 2025 remains uncertain due to the tumultuous economic environment. In the months before Joann's insolvency, no specific companies were publicly reported to have been in talks with Joann regarding expanding their stores.
The proposed cure amounts for the locations range from $0 to over $50,000. It's worth noting that Joann went through two bankruptcies in about 10 months, and little new shopping center growth is planned in the US for the foreseeable future. The locations are across various states, including California and Texas.
This move by Burlington underscores the ongoing shifts in the retail landscape, with chains with high store growth ambitions, like Burlington, needing to be aggressively going after locations from retail bankruptcies, as suggested by Evercore ISI analysts.
