Craft retailer Joann has entered Chapter 11 for the second time in less than a year, this time to facilitate a sale of its assets.

The company is seeking court approval to sell all of its assets under Section 363 of the US Bankruptcy Code, pursuant to which Gordon Brothers Retail Partners would serve as the ‘stalking horse’ bidder.

The transaction is subject to higher offers as the company continues to solicit alternate bids.

Joann’s stores and e-commerce site will operate as usual during the process, with all team members continuing to receive pay and benefits.

“The last several years have presented significant and lasting challenges in the retail environment, which, coupled with our current financial position and constrained inventory levels, forced us to take this step,” said Michael Prendergast, interim CEO.

Joann first filed for Chapter 11 bankruptcy protection last March after its debt reached more than $1.1 billion. It became a private company in April as it exited bankruptcy and appointed Prendergast as interim CEO in June.

“When Joann emerged from bankruptcy last year, it did so with breathing space rather than a complete solution to all its problems,” commented GlobalData MD Neil Saunders. “While it reduced its debt burden, it did not eliminate it, which meant it had very little room for error in terms of execution.”

Saunders cited several problems including inventory issues, a weakened assortment of products, and subpar in-store experience. The growing presence of online specialists and strong operators like Hobby Lobby also impacted Joann’s sales, he said.

With $615.7 million of debt and $133 million of trade debt outstanding, Joann did not have room for the problems that have plagued it over the past year, the analyst elaborated, adding that finding a buyer is necessary for the business to continue.