J. Crew Group Inc. filed for bankruptcy, unable to revive flagging sales of its preppy clothing line amid the coronavirus pandemic and crushed by debt rooted in a long-ago leveraged buyout.
The retail chain reached a deal with a majority of its lenders to convert $1.65 billion of debt into equity, J. Crew said in astatement Monday.
Lenders led by Anchorage Capital Group, Blackstone Group Inc.’s GSO Capital Partners and Davidson Kempner Capital Management are providing $400 million of financing that will allow the company to maintain operations during the Chapter 11 restructuring, according to the statement.
The bankruptcy filing in U.S. Bankruptcy Court in Richmond, Virginia, allows J. Crew to stay in business while cutting its borrowings. Normally that would include keeping the doors open for its J. Crew and Madewell stores, but sales at those outlets vanished when the coronavirus forced shoppers to stay home and nonessential businesses to shut.
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