J.Crew Files for Bankruptcy as Coronavirus Worsens Financial Troubles
The retailer is over $1.5 billion USD in debt.
J.Crew Group, the multi-brand retailer that operates J.Crew and Madewell, has filed for Chapter 11 bankruptcy due to financial troubles exacerbated by the coronavirus pandemic. As reported by CNN, the company has negotiated a deal with lenders to convert approximately $1.65 billion USD debt into equity.
As the spread of COVID-19 escalated into a full-blown health crisis, J.Crew Group was forced to temporarily close down its nearly 500 stores across the U.S., a huge blow to sales. The pandemic also postponed Madewell’s initial public offering, which was filed back in September 2019 and would have helped the retailer pay off a portion of its debt.
J.Crew Group plans to continue day-to-day operations, according to a statement by CEO Jan Singer. “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 added.
Just last month, denim brand True Religion filed for Chapter 11 bankruptcy due to financial losses brought on by the pandemic. Similarly, luxury retailer Neiman Marcus is over $4 billion USD in debt and is reportedly in talks with lenders about a potential bankruptcy loan.