Retailer J.Crew is filing for bankruptcy after being heavily impacted behind the COVID-19 pandemic, making them the first large fashion company to file for bankruptcy since the Coronavirus.
The bankruptcy includes $400 million in debtor-in-possession financing from its lenders. The Chapter 11 filing allows J.Crew to re-define their debts ultimately turning $1.6 billion of the company’s entire debt into equity via a report from MarketWatch. In a brief statement, CEO of Anchorage Capital Groupstated, “The significant deleveraging contemplated by this agreement, coupled with J.Crew Group’s strategy to strengthen its robust e-commerce platform to drive continued growth in its direct-to-consumer segment, will position the company for future success.”
In 2010, the company was acquired by TPG Capital and Leonard Green & Partners for $3 billion enabling the company then to make necessary adjustments to continue running. With Stay Home, Work Safe orders in place around the world, retailers have been shut down for weeks now barring companies to sell and make money. J.Crew will now have to rely solely on a group of lenders including Anchorage Capital Group, L.L.C., GSO Capital Partners, Davidson Kempner Capital Management LP and etc for operations amidst the shutdown(s).