US, WASHINGTON (ORDO NEWS) — Blow after blow receives the American economy from the coronavirus pandemic. The first major victim was the J.Crew chain of clothing and accessories stores, which had filed for bankruptcy the day before.
The retailer was able to agree with creditors to write off debt of more than $ 1.5 billion in exchange for a controlling interest in the reborn company. In addition, J.Crew will retain a loan of $ 400 million, which will go towards providing operations during the bankruptcy proceedings. Such access to liquidity is especially important now, when, due to quarantine and the closure of all stores in the chain, the retailer cannot arrange for the liquidation of goods.
It should be noted that the company’s problems began even before the pandemic and were associated with a drop in offline sales and unsuccessful rearrangements among top management. For the fiscal year ending February 1, the retailer lost $ 78.8 million.
At the same time, according to analysts, against the backdrop of the coronavirus pandemic, J.Crew will not be the last bankrupt in the retail industry. So, similar problems with debt servicing are observed at the JC Penney department store chain, as well as at the Neiman Marcus retailer of luxury goods.
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