J. Crew: Can They Survive Bankruptcy and Coronavirus?
Will the longtime retailer survive the crisis?
Back on May 4, just a few weeks into the coronavirus shutdowns, retailer J. Crew announced that it had filed for bankruptcy protection, becoming the first major retailer of the coronavirus era to declare bankruptcy.
That does not mean, of course, that the company is going out of business, and in fact, there have been quite a few developments with the company since it declared bankruptcy. Per CNN, J. Crew agreed at the time to “convert about $1.65 billion of debt into equity.”
“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,” CEO Jan Singer said the day of the filing.
“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.
On June 12, J. Crew announced that it had reopened more than 300 of its stores, after they were temporarily shuttered due to the pandemic, while re-activating both the majority of its store associates, and hundreds of jobs at its distribution center in Virginia.
At the same time, J. Crew announced that it had filed with the U.S. Bankruptcy Court to “reject” - meaning, break - 67 of its store leases. In early July, they filed with the court the locations of eight stores that would be closing in August. Per Business Insider, the closing stores are in Nashville, Emeryville, CA., Chicago, Washington, Southampton, NY., St. Paul, Carlsbad, CA and Deer Park, IL.
The company’s website currently lists 170 stores in the United States, 6 in the United Kingdom and three more in Canada.
The bankruptcy hasn’t stopped J. Crew from continuing to announce business initiatives. According to Forbes, the Edie Parker handbag line has announced a collaboration with J. Crew.
J. Crew’s filing in May had followed many years of struggles from the retailer, as demonstrated in a recent video produced by the Wall Street Journal. Beyond the havoc wreaked on retail by coronavirus, brand’s decline has been attributed to a wide variety of factors, from a general decline in the retail sector to designs that got out of touch with popular tastes to a massive amount of long-term debt.
The company, which went public and then private again, had been planning to spin off its Madewell brand, but those plans were scuttled amid the bankruptcy.
Another retail chain, Brooks Brothers, also filed for bankruptcy, earlier this month.
Stephen Silver, a technology writer for The National Interest, is a journalist, essayist and film critic, who is also a contributor to Philly Voice, Philadelphia Weekly, the Jewish Telegraphic Agency, Living Life Fearless, Backstage magazine, Broad Street Review and Splice Today. The co-founder of the Philadelphia Film Critics Circle, Stephen lives in suburban Philadelphia with his wife and two sons. Follow him on Twitter at @StephenSilver.