Major U.S. clothing retailer files for bankruptcy
Published May 4, 2020 at 5:28 pm
The U.S. company that owns the high-end clothing retailer J. Crew announced Monday (May 4) that they had filed for bankruptcy protection amid the coronavirus pandemic.
J.Crew Group, Inc. said they filed papers seeking Chapter 11 protection and that the company had reached an agreement with its debt holders to convert approximately $1.65 billion of debt into equity.
“This agreement with our lenders represents a critical milestone in the ongoing process to transform our business with the goal of driving long-term, sustainable growth for J.Crew and further enhancing Madewell’s growth momentum,” said Jan Singer, Chief Executive Officer, J.Crew Group in a press release.
“Throughout this process, we will continue to provide our customers with the exceptional merchandise and service they expect from us, and we will continue all day-to-day operations, albeit under these extraordinary COVID-19-related circumstances.”
Madewell is the company’s denim brand that has gained in popularity over the last couple of years. Its sales growth has grown even as J.Crew sales have slowed.
According to reports from MarketWatch, Madewell had plans to go public this year. Under the agreement with lenders, Madewell will remain part of J. Crew Group, Inc.’s portfolio.
J. Crew Group plans to undergo restructuring in the coming months in preparation to reopen when the time comes.
“As we look to reopen our stores as quickly and safely as possible, this comprehensive financial restructuring should enable our business and brands to thrive for years to come,” Singer said in the statement.
The Company has filed a series of customary ‘first-day’ motions with the Bankruptcy Court seeking to maintain its operations during the restructuring process to help facilitate a smooth transition into Chapter 11, the press release says.
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