J.Crew ($PRIVATE:JCREW) filed for bankruptcy this morning, making the company Coronavirus' first major retail casualty in America. But this news was a long time coming. The retailer was once an elevated mall staple, a reliable source of prep-adjacent basics for midtown 9-to-5ers and Michelle Obama alike, but it had been feeling the effects of the looming retail apocalypse and the loss of some of the brand's key players.
In 2017, J.Crew lost longtime creative director and president Jenna Lyons, menswear designer Frank Muytjens, and former CEO and chairman Mickey Drexler. The company has had a revolving door of CEOs in recent years.
Job postings on J.Crew's career page have been declining over the past few months. Openings hit a low of 647 in March.
Public interest in the brand and its subsidiaries like Madewell had been waning for years. J. Crew's Facebook likes started to plateau in 2018 after steady growth year-over-year, despite the company trying to win customers over with drastic price cuts and discounts and even an outlet collection.
According to the New York Times, J.Crew will hand over financial control to top creditors like the hedge fund Anchorage Capital, by converting $1.65 billion of its debt into equity. The company will also hold onto Madewell.
E-commerce operations will continue throughout the bankruptcy case. Once lockdowns are lifted, the company plans to open J.Crew and Madewell stores.
“This agreement with our lenders represents a critical milestone in the ongoing process to transform our business,” J.Crew’s chief executive Jan Singer said in a statement.
J.Crew's demise can be traced back to its resistance of evolving trends, but also due to an unprecedented blow to the fashion industry. The pandemic is accelerating the retail apocalypse everyone knew was coming. NYT reports that sales of clothing and accessories fell by more than half during March. Neiman Marcus is one of many others considering bankruptcy. And they won't be the last.
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