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J Crew Bankrupt Due To Corona Pandemic... by Chuky7(m): 1:46pm On May 04, 2020 |
J. Crew has filed for Chapter 11 bankruptcy.
The clothing company announced early on Monday
that it had reached an agreement with its lenders to
convert about $1.65 billion of its debt into equity.
The company has been struggling under a heavy
debt load for some time. As of February, it had
nearly $1.7 billion in debt .
According to The Wall Street Journal, it had planned
to leverage a 2020 initial public offering of its
popular Madewell brand to lessen some of its debt.
Plans for the IPO were abandoned near the end of
March, however, as the company failed to reach a
deal with lenders.
J. Crew on Monday said it had secured $400
million in funding from its lenders to navigate its
way through the restructuring process.
The retailer has had ups and downs in recent years.
After going private in a leveraged buyout by TPG
and Leonard Green & Partners in 2011, it
experienced a bit of an identity crisis, raising prices
when many shoppers were seeking more budget-
conscious options. Former CEO Mickey Drexler later
told The Journal that was the retailer's biggest
mistake.
Drexler left his post in 2017 after 14 years as CEO.
J. Crew also lost its longtime creative director
Jenna Lyons and narrowly avoided bankruptcy at
about the same time.
Like many other retailers, J. Crew's problems have
been exacerbated by the coronavirus pandemic. It
was forced to temporarily close its doors as states
enacted restrictions on nonessential businesses.
These stores remained closed as of Monday.
While some of its competitors are hanging by a
thread — including Neiman Marcus , which is
expected to file for bankruptcy protection
imminently — J. Crew is the first major US retailer
to announce bankruptcy during the pandemic.
"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,"
Jan Singer, the CEO of J. Crew Group, said in a
statement on Monday.
She continued: "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. 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." https://www.businessinsider.com/jcrew-files-for-bankruptcy-2020-5 1 Like |
Re: J Crew Bankrupt Due To Corona Pandemic... by SavageResponse(m): 4:39pm On May 09, 2020 |
Covid-19 is going to leave a very sour taste in the mouth of the world |
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