J.Crew Group Declares Chapter 11
Fashion brands and retailers have closed stores, furloughed staff and made SOS calls during the past six weeks due to the COVID-19 pandemic. On May 4, J.Crew Group, Inc. became the first United States–based retailer to file for Chapter 11 bankruptcy due to the effects of the coronavirus on the economy.
The New York–headquartered parent company for the J.Crew and Madewell brands said that it had filed for Chapter 11 in the U.S. Bankruptcy Court in the Eastern District of Virginia. Under the terms of a transaction support agreement made with its lenders, it will convert $1.65 billion of the company’s debt into equity, according to a J.Crew statement.
J.Crew Group, Inc., also secured commitments for a debtor-in-possession financing facility of $400 million provided by existing lenders Anchorage Capital Group, LLC, GSO Capital Partners and Davidson Kempner Capital Management LP among others, said Jan Singer, J.Crew Group’s chief executive officer. Singer also made it clear that Madewell will remain part of J.Crew Group, Inc., and that Libby Wadle will continue to serve as Madewell’s chief executive officer.
“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,” Singer said.