J. Crew Likely to File for Bankruptcy in Virus’s First Big Retail Casualty

J. Crew Likely to File for Bankruptcy in Virus’s First Big Retail Casualty

J. Crew, the mass-industry apparel firm whose preppy-with-a-twist products were being worn by Michelle Obama and appeared at New York Style Week, is anticipated to file for individual bankruptcy security as soon as Monday. It would be the initial key retailer to tumble all through the coronavirus pandemic, even though other large industry names such as Neiman Marcus and J.C. Penney are similarly battling with the devastating toll of mass shutdowns.

J. Crew has been in negotiations with lenders on how to take care of its money owed for months, in accordance to two individuals with knowledge of the predicament, who spoke on the affliction of anonymity because conversations had been confidential. The retailer’s board was predicted to confer on Sunday evening and J. Crew could file for Chapter 11 individual bankruptcy security as soon as Monday, the folks stated. The organization on Sunday did not instantly respond to a request for comment.

Merchants have furloughed employees, slashed govt salaries and hoarded money in a determined try to endure till the shutdowns are lifted. And there is prevalent acknowledgment that J. Crew, which also owns the popular millennial denim brand name Madewell, is not probably to be the only retailer to deal with the brink.

“Actually, this is a J. Crew ensemble,” Mrs. Obama replied, referring to her $148 yellow pencil skirt, $148 yellow and brown print tank prime and $118 matching yellow cardigan. “Ladies, we know J. Crew. You can get some very good stuff on the web!”

It was a priceless marketing second. Soon after that, every person realized J. Crew, which appeared to embody the substantial/small mix-and-match craze of the moment.

The firm was acquired by TPG in 1997 in a leveraged buyout from the founding Cinader relatives, and was taken general public in 2003 — only to be reacquired for close to $3 billion by TPG and Leonard Green & Companions approximately a decade in the past.

Its inventive director, Jenna Lyons, who had to start with joined as portion of the design and style staff in 1990, became a boldface identify, identified for her black-rimmed eyeglasses, gangly body and like of sequins and camouflage. Newspaper reviews crowed about the comeback of the company’s main govt, Millard S. Drexler, who had formerly led Gap Inc. for decades. Mr. Drexler, who goes by Mickey, turned well known for using his bicycle all over the place of work and examining in with shop associates through speakerphone.

Madewell, which filed for an I.P.O. in the fall, was predicted to go public this spring though J. Crew remained personal, but all those designs had been in the end scrapped in March, which additional a new wave of force and problem marks to J. Crew’s upcoming.

“The corporations heading into personal bankruptcy, for the most part, were being companies that ended up battling before Covid — we have not observed true Covid-only bankruptcies,” claimed James Van Horn, a husband or wife at the legislation business Barnes & Thornburg and a expert in retail bankruptcy.

Having said that, he extra, “depending on how the present-day scenario carries on, that may perhaps alter.”

For occasion, Brooks Brothers, an additional quintessential American purchasing establishment, is already experiencing thoughts about its foreseeable future.

“In the regular training course of business, Brooks Brothers continually explores different strategic alternatives to position the firm for advancement and achievements, in partnership with its economic advisers at P.J. Solomon,” a spokesman claimed, in reaction to issue about a prospective sale.

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Posted by Krin Rodriquez

Passionate for technology and social media, ex Silicon Valley insider.