Preppy retailer J.Crew filed for Chapter 11 bankruptcy protection Monday morning, according to multiple reports, becoming the first major retailer to do so amid the coronavirus pandemic, which forced businesses to shut their doors out of safety—and all but eliminated brick-and-mortar sales.
The company said it reached a deal to restructure $1.65 million of debt by converting it into equity.
Separately, the company secured $400 million in financing through existing lenders Anchorage Capital, LLC, according to a J.Crew press release.
J.Crew was planning an initial public offering for its Madewell brand prior to the pandemic, but March’s stock market volatility helped scuttle it, the Wall Street Journal reported.
Bloomberg reported in March that the IPO was called off when J.Crew couldn’t agree on terms with its creditors.
Madewell will remain part of J.Crew’s holdings as part of the bankruptcy filing, and Libby Wadle will maintain her role as Madewell’s CEO.
J.Crew plans to reopen its nearly 500 stores once lockdowns lift.
“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,” said J.Crew CEO Jan Singer in a press release. “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.”
Between $1 billion and $10 billion. That’s how much money J.Crew owes—to over 25,000 creditors—according to its bankruptcy filing.
J.Crew began life in 1947 as a women’s apparel catalog titled Popular Merchandise. In 1983, the company was renamed; the first J.Crew store, in Manhattan, opened in 1989. J.Crew became a go-to for preppy sweaters, chinos, work shirts and other trappings. The company’s fashions grew in popularity under the stewardship of creative director Jenna Lyons and chief executive Mickey Drexler. In 2011, J.Crew went private in a $3 billion leveraged buyout. It’s also posted losses for the last five years. Lyons departed in 2017, while Drexler left in 2019. Singer, a former Victoria’s Secret executive, was named J.Crew’s CEO in January 2020.