Retail bankruptcy filings are coming

J. Crew files for bankruptcy; Madewell to remain part of J.Crew

J.Crew Group announced it has reached an agreement with its lenders holding approximately 71% of its Term Loan and approximately 78% of its IPCo Notes, as well as with its financial sponsors, under which the Company will restructure its debt and deleverage its balance sheet, positioning J.Crew and Madewell for long-term success.

Madewell to remain part of the J.Crew Company, Stockwinners

Under the terms of the Transaction Support Agreement, the Company’s lenders will convert approximately $1.65 billion of the Company’s debt into equity.

To facilitate the restructuring contemplated by the TSA, the parent company of J.Crew Group, Inc., Chinos Holdings, Inc. and certain affiliates, have filed voluntary petitions for relief under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the Eastern District of Virginia.

The Company has secured commitments for a debtor-in-possession financing facility of $400 million and committed exit financing provided by existing lenders Anchorage Capital Group, L.L.C., GSO Capital Partners and Davidson Kempner Capital Management LP, among others.

Subject to Court approval, the DIP financing, combined with the Company’s projected cash flows, is expected to support its operations during the restructuring process.

As part of the TSA, Madewell will remain part of J.Crew Group, Inc.

Libby Wadle will continue in her role as CEO of Madewell.

J.Crew files for Chapter 11 bankruptcy protection, Stockwinners

“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,” said Jan Singer, CEO, J.Crew Group.

Neiman Marcus is expected to file for bankruptcy protection too

“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.

Pier 1 Imports filed for bankruptcy protection

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.”

GNC is also expected to file for bankruptcy protection

The Company has filed a series of customary “first day” motions with the Bankruptcy Court seeking to maintain its operations during the restructuring process to help facilitate a smooth transition into Chapter 11.

JCP is inline for bankruptcy filing protection following weak sales

Note that in 2011, TPG Capital LP and Leonard Green & Partners LP privatized J.Crew in a $3 billion leveraged buyout.

Recent bankrupt retailers include Forever 21 and Pier 1 Imports.

Forever 21 filed for bankruptcy protection recently

Other retailers that may file for bankruptcy in the near future include: Neiman Marcus, JCP, GNC, and AEO. Note that Gaps (GPS) has been suffering from soft retail sales. Lands’ End (LE) is also suffering from soft sales.

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This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility.

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