Retail

J. Crew Seeks Bankruptcy Protection

J. Crew

Amid fallout from the coronavirus pandemic, J. Crew Group Inc. has become the first major retailer to file for bankruptcy with intentions to cede control of the company to lenders. The retailer made its filing in a federal court with a deal to remove debt of $1.65 billion in exchange for giving ownership to those who are owed funds, Reuters reported.

Davidson Kempner Capital Management, Anchorage Capital Group and GSO Capital Partners reportedly have meaningful shares of senior debt in the company and are in a position to take control of the retailer. The firms are also giving approximately $400 million in financing to support J. Crew's operations as it enters Chapter 11 bankruptcy proceedings.

J. Crew intends to shutter some retail locations for good, but it has not yet decided on how many it will ultimately close, per an unnamed source. The virus' outbreak forced the retailer shutter its almost 500 J. Crew, Madewell and J. Crew Factory locations for a time.

The market unrest and economic impacts of the crisis led to the retailer putting aside initial public offering (IPO) plans for Madewell, which will still be a part of J. Crew Group. In addition, the company noted that Libby Wadle will retain the CEO position at Madewell.

The coronavirus has affected traditional department store operators and other merchants that have been forced to close stores to stop its spread. These companies were already having trouble as consumers transitioned to online shopping before the pandemic.

The move also comes on the heels of PYMNTS COVID-19 research showing that among consumers who are now shopping more online, only one-third will go back to physical stores to shop when they reopen. More telling, perhaps, is that only 40 percent of those who used to shop in a physical store say they will resume their normal shopping activities when those stores reopen.

——————————

NEW PYMNTS DATA: HOW WE SHOP – SEPTEMBER 2020 

The How We Shop Report, a PYMNTS collaboration with PayPal, aims to understand how consumers of all ages and incomes are shifting to shopping and paying online in the midst of the COVID-19 pandemic. Our research builds on a series of studies conducted since March, surveying more than 16,000 consumers on how their shopping habits and payments preferences are changing as the crisis continues. This report focuses on our latest survey of 2,163 respondents and examines how their increased appetite for online commerce and digital touchless methods, such as QR codes, contactless cards and digital wallets, is poised to shape the post-pandemic economy.

TRENDING RIGHT NOW