The year 2020 started out promisingly enough for J.Crew, the apparel retailer that filed for Chapter 11 bankruptcy protection on Monday.
J.Crew Group finally found a new CEO in January in Jan Singer, a former executive at Nike and Victoria’s Secret, filling a corner office that had been empty for 14 months. Its namesake brand, once enormously successful but in decline for years, seemed to finally be stabilizing if not quite thriving. And there was appetite for the planned spin-off of Madewell, its smaller but booming sister brand, that would improve its finances.
But the mass store closings that the pandemic imposed on mall-based chains like J.Crew and Madewell pushed the highly indebted private-equity owned company over the edge financially.
The Chapter 11 filing, which calls for J.Crew to continue to operate as before, will remove the debt albatross from J.Crew Group’s neck by turning it into equity, and give the troubled but still beloved company something it really needs: a clean slate to reinvent itself after years of turmoil.
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But that will be no small task. J.Crew the brand spent the last decade—long before the coronavirus showed up and eroded the brick-and-mortar retail industry—confusing shoppers with a grab-bag of aesthetics, garments of inconsistent quality, and a stale store experience.
Source: Fortune