Struggling fabric and sewing retailer Hancock Fabrics will shutter three of its Minnesota stores as part of a broader reorganization plan that will close 70 stores nationwide, including its flagship location in Tupelo, Miss.

The Minnesota stores are at Southtown Center in Bloomington, on Hudson Road in Woodbury and on West Larpenteur in Roseville.

In its second bankruptcy filing on Tuesday, Hancock Fabrics said it might put the entire company of 266 stores in 37 states up for sale as it tries to restructure its balance sheet, access cash and cut costs by shuttering money-losing outlets.

The Baldwyn, Miss.-based company was founded in Tupelo in 1957 and has been hampered by poor performance and growing debt in a challenging retail market. The company filed for Chapter 11 in 2007 and emerged a year later.

In its bankruptcy filing this week in Delaware, Hancock officials said sales during the holiday season were $8 million below expectations and that its borrowing limit has been cut.

Sales at the publicly traded company dropped by 5 percent last year to $269 million, and Hancock said it will post a loss for the 12-month period ended Jan. 31.

The company operates 10 stores in Minnesota, with six of them in the Twin Cities metropolitan area. Liquidation of the stores began nationwide on Monday.

In its news release, Hancock said it was “considering all possible options for maximizing stakeholder value, including the sale of the business as a going concern in either a single transaction or a series of transactions. It is also reviewing investment options with existing stakeholders and third parties.”

Hancock Senior Vice President Dennis Lyons said in court documents that closing what amounts to a third of its locations will leave the retailer with “a smaller, more profitable core group of stores.”

The company set a bid deadline of March 9 for potential buyers of its remaining stores.

Its stock, already trading at just 4 cents a share Wednesday, dropped to about 2 cents at the close of trading.