// J.Crew to emerge from bankruptcy in early September
// A Virginia federal court approved of the retailer’s restructuring plans
J.Crew has said it expects to come out of bankruptcy by early September after a US court approved of its restructuring plan.
The plan was given the green light by a Virginia federal court, which will equal over $1.6 billion of secured debt, and provide for $400 million in asset-based loan as well as $400 million of fresh financial aid.
The US fashion retailer filed for Chapter 11 bankruptcy earlier this year before fellow US retailers Neiman Marcus Group, J.C. Penney and Brooks Brothers joined.
- J.Crew the first US retailer to file for Chapter 11 bankruptcy protection
- Market Snapshot: United States of America
Earlier this year, the company temporarily closed its 500 stores due to the Covid-19 pandemic and also shelve its plans for an initial public offering of its Madewell business.
In early May, J.Crew became the first US retailer to file for Chapter 11 bankruptcy protection.
March sales at stores and restaurants across the US had their most severe plunge on records dating back to 1992.
Clothing sales fell more than 50 per cent that month and it has grown worse.
The abrupt closure of stores threatens the overall health of the US, with consumers driving 70 per cent of all economic activity in the country.
Parts of the retail sector were already under duress before the arrival of Covid-19 due to seismic changes in what is bought and how.
At the time, J.Crew’s lenders agreed to convert $1.65 billion (£1.3 billion) of its debt into equity.
It also secured commitments for financing of $400 million (£317 million) from existing lenders Anchorage Capital Group, LLC, GSO Capital Partners and Davidson Kempner Capital Management LP, among others.
The retailer was acquired by TPG Capital and Leonard Green & Partners for $3 billion (£2.4 billion) in 2011.