J. Crew was having a tough time even before the pandemic arrived. Now, the New York Times says it's the "first major retailer to fall" from the virus, seeking bankruptcy protection to try to stay alive. On Monday, the clothing retailer's parent company, Chinos Holdings, filed to start Chapter 11 proceedings, with lenders agreeing to convert $1.65 billion of the clothing retailer's debt into equity. The company's online operations will continue, and it hopes to have its J. Crew and Madewell stores up and running again once the worst of the pandemic passes. "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," new CEO Jan Singer says in a statement, per the Wall Street Journal.
The company had been struggling already due to a $1.7 billion debt load, consumers not warming up to its more recent fashions, and the online shopping boom. CNN Business notes J. Crew had had plans to pay down some of that debt by bringing its Madewell brand public, but those plans were scuttled once the pandemic lockdowns started forcing store closures. "Madewell was supposed to be the saving grace," a Debtwire retail bankruptcy expert says. "But no one wants to do an IPO right now, especially a retail IPO. COVID-19 upturned everything." J. Crew isn't the only big retailer that's having problems: Both the Times and WSJ note that Neiman Marcus and JC Penney, among others, are also trying to keep their heads above water. (Read more J. Crew stories.)