J.Crew retail chain filed for bankruptcy on 4/5/2020. It is the first major US retailer to file a bankruptcy due to the Covid-19 pandemic.
As of August 2016, this business has more than 450 stores across the United States.
Founded in 1947 with two founders, Mitchell Cinader and Saul Charles, the company initially primarily sold women’s clothing with the segment of cheap clothing.
However, in the last few years, this New York-based retailer has faced high debt burdens and difficult sales.
Jenna Lyons, a veteran designer and Mickey Drexler, a famous retail executive, quit their jobs and moved to another company.
According to Moody’s, J.Crew has an annual turnover of $ 2.5 billion, however, the amount as of February 2020 is only $ 93 million.
The company says it has reached an agreement with related parties to convert $ 1.65 billion in debt into equity.
The company is guaranteed $ 400 million in financing from current creditors, Anchorage Capital Group, GSO Capital Partners and Davidson Kempner Capital Management to help businesses operate during bankruptcy procedures.
The Covid-19 pandemic was like a blow that forced stores to close. The retail industry is in a serious crisis. Other retailers like Neiman Marcus and JC Penney are also under pressure to file for bankruptcy earlier than they expected.
Neiman Marcus is discussing benefits during the bankruptcy process. Photo: Fortune
JC Penney was unable to pay interest to the creditor. Photo: CNBC
Following J.Crew, all Papyrus retail stores were closed when the parent company - The Schurman Retail Group declared bankruptcy in early January this year.
A booth of Papyrus chain in Texas, USA. Photo: Getty
After Kroger announced it would divest from Lucky’s Market, a grocery store chain last December, observers made predictions about the chain’s fortunes. Just one month later, in early January of this year, Lucky’s declared bankruptcy.
A supermarket chain of Mary’s Market in Arizona, USA. Photo: BI
FoodFirst Global Restaurant, the parent company of the Brio Italian Mediterranean restaurant chain and the Italian restaurant chain Bravo Fresh, also filed for bankruptcy on April 10 this year.
The company said that 71 of its 92 restaurants were temporarily closed amid the corona virus outbreak.
Photo: Business Insider
Businesses in the retail industry are facing great financial costs. Along with the ongoing rental costs, it is not known when the business can resume normal business, as well as how long it will take to reopen the purchasing power as before the outbreak.
