J. Crew Files for Chapter 11 Protection
The retailer says that the Chapter 11 process will not prevent it from reopening its stores.
NEW YORK—In what is the first major retail bankruptcy since the novel coronavirus struck the US, J Crew has filed for Chapter 11 protection.
The retailer announced Monday morning that it has reached an agreement with its lenders to restructure its debt and deleverage its balance sheet. Under the terms of the agreement lenders will convert approximately $1.65 billion of the J. Crew’s debt into equity. J. Crew will receive $400 million in debtor-in-possession financing from its lenders to help it restructure.
It is unclear if it plans to close any stores as part of the restructuring but the retailer has said that “it looks forward to reopening its stores in accordance with CDC guidance as quickly and safely as possible.”
“The Chapter 11 process will not prevent us from reopening our stores,” it also said.
J. Crew will continue all day-to-day operations, “albeit under these extraordinary COVID-19-related circumstances,” said Jan Singer, CEO of the J. Crew Group.
As of May 4, 2020, the company operates 181 J.Crew retail stores, 140 Madewell stores, jcrew.com, jcrewfactory.com, madewell.com and 170 factory stores.
J. Crew may be the first retailer to succumb to the pressures of Covid-19, but it surely won’t be the last. Neiman Marcus, JCPenney and Lord & Taylor are all reportedly exploring bankruptcy right now.