Fashion company J Crew has filed for individual bankruptcy protection, producing it the 1st huge US retailer to slide victim to the coronavirus pandemic.
Underneath the terms of the filing, its key creditors are established to just take control of the group in exchange for cancelling its debts of $1.65bn (£1.3bn).
They are also furnishing about $400m of refreshing financing to retain J Crew’s functions afloat.
Its 500 outlets have been closed by the pandemic and some will not reopen.
Nevertheless, the agency has not still disclosed how quite a few shops will vanish.
Handle of the team will now pass into the hands of Anchorage Capital Group, GSO Cash Companions and Davidson Kempner Money Administration, which hold significant amounts of its financial debt.
As well as J Crew, the group also owns denim apparel specialist Madewell, which it had planned to spin off as a separate entity before the outbreak of the virus.
J Crew main government Jan Singer described the go as a “comprehensive financial restructuring” aimed at allowing for the business enterprise “to prosper for a long time to come”.
“Throughout this method, we will keep on to present our shoppers with the exceptional items and provider they expect from us, and we will carry on all working day-to-working day functions, albeit under these remarkable Covid-19-linked situation,” she added.
Kevin Ulrich, main executive of Anchorage Capital Team, claimed: “J Crew and Madewell are two typical American brand names with deeply loyal customers.
“The sizeable deleveraging contemplated by this arrangement, coupled with J Crew Group’s method to reinforce its robust e-commerce platform to generate ongoing expansion in its direct-to-shopper segment, will placement the firm for long term success,”