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American fashion firm J.Crew files for bankruptcy

The American fashion firm J.Crew has presented a debt restructuring proposal, for which it has voluntarily requested to avail itself of the special protection offered by Chapter 11 of the United States Bankruptcy Law, as reported by the company on Monday in a statement.

The company has assured that the debt restructuring proposal has been agreed with the lenders who hold 71% of their debt, as well as with the bondholders that represent 78% of this debt instrument. Likewise, “financial sponsors” have also participated in the agreement.

In this way, creditors have agreed to exchange 1,650 million dollars (1,508.8 million euros) of debt for shares.

For this restructuring process, should the plan be approved by judicial authorities, J.Crew has signed a $ 400 million (365.8 million euros) credit facility with his current lenders Anchorage Capital Group, GSO Capital Partners and Davidson Kempner Capital Management, among others. The company is confident that this liquidity line, together with the expected cash flow, will be sufficient to maintain operations during the restructuring process.

“This agreement with our lenders represents a critical milestone in our business transformation process with the goal of achieving sustainable long-term growth for J.Crew,” said the company’s CEO, Jan Singer.

“During this process, we will continue to provide our customers with the exceptional merchandise and service they expect from us, and will maintain all day-to-day operations, despite these extraordinary circumstances related to the Covid-19. While we hope to reopen our stores as As quickly and safely as possible, this financial restructuring should allow us to continue to make progress in our businesses and brands for years to come, “he added.

The company recorded a net loss of $ 78.8 million (€ 72.1 million) in its last fiscal year, ending in early February, representing a 34.3% reduction compared to the ‘red numbers ‘from a year earlier. As of March 2, 2020, the latest available data, the company had 492 stores in the United States.

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