Clothing apparel company J.Crew filed for bankruptcy Monday.
J. Crew has become the first major retail bankruptcy of the coronavirus pandemic.
According to CNBC, the New York-based retailer had already been struggling under a heavy debt load and sales challenges, suffering from criticism that it fell out of touch with its once-loyal customers. In the past few years, the brand lost its longtime design chief, Jenna Lyons, and famed retail executive Mickey Drexler, who was CEO. J.Crew had roughly $2.5 billion in annual sales and about $93 million in total liquidity as of February, according to Moody’s. The company said Monday it has reached a deal with stakeholders to convert $1.65 billion of its debt to equity.
The retailer operates 182 J.Crew retail stores, as well as 140 Madewell stores, the youthful brand it launched in 2006. J.Crew had hoped to spin off Madewell in an IPO that could have helped pay down its debt load, but faced pushback from creditors.
Bankruptcy in the coronavirus times
Bankruptcy during the pandemic remains an uncharted course, as each state assesses whether and when to reopen stores after ordering all nonessential retail to shutter.
J.Crew said in a statement it will “continue all day-to-day operations, albeit under these extraordinary COVID-19-related circumstances.” It said it will look “to reopen our stores as quickly and safely as possible.”