The preppy clothier J. Crew has become the first major retailer to file for bankruptcy protection amid the coronavirus pandemic.
The company, which also owns Madewell brands, has accrued nearly $1.7 billion in debt and will now transfer control to its lenders in hope of restructuring some of that debt into equity.
But that doesn't necessarily mean the seller of women's, men's, and children's apparel will be going out of business. The company says online operations will proceed as normal and it plans to reopen stores as pandemic shutdowns begin to scale back.
J. Crew Group CEO Jan Singer said, "As we look to reopen our stores as quickly and safely as possible, this comprehensive financial restructuring should enable our business and brands to thrive for years to come."
While J. Crew is the first national retailer to file for Chapter 11 protection, others in the industry have seen an historic downturn during the pandemic as many other retail giants are feeling the impact as well.
JCPenney and Neiman Marcus were struggling long before the pandemic and nationwide lockdowns have only complicated things, forcing retailers to shut down stores and furlough hundreds of thousands of employees.
JCPenney had nearly $4 billion in debt at the end of last year. Bloomberg news said Neiman Marcus may be the next retailer to file for bankruptcy to alleviate its $4.3 billion debt.
Contains footage from CNN.