J.Crew Files For Bankruptcy

J.Crew Group, Inc., which owns the J.Crew and Madewell brands, has filed for bankruptcy protection as the coronavirus pandemic slams retailers across the country. The company announced Monday it has petitioned to begin Chapter 11 proceedings in the Eastern District of Virginia.

The retailer said it has reached an agreement with its lenders to convert about $1.65 billion of its debt into equity. It plans to position J.Crew and Madewell for "long-term success" after it emerges from bankruptcy.

Madewell will remain part of J.Crew Group, with Libby Wadle continuing in her role as CEO of the brand.

"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," Jan Singer, CEO of J.Crew Group, said in a statement. "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. 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."

The retailer had been struggling in recent years, reporting a $78.8 million net loss during the latest fiscal year and a $120 million loss the year before, CNN reported. Sales increased 2 percent last year, but there was a large divide between the success J.Crew and Madewell, with the latter being more profitable.

Madewell's planned initial public offering – a potential life preserver for the company – was put on hold due to the coronavirus shutdown.

J. Crew has 15 locations in Massachusetts.