US fashion retailer J Crew has secured the support of a majority of its lenders under its term loan agreement in a move that immediately ends all litigation activities and marks a "clear and more confident path" to executing its business plan.

Last week the company disclosed terms of plans to restructure its debt in a move expected to cut the value of its bonds roughly in half. J Crew said it will undertake a debt swap to exchange any and all of the outstanding US$566.5m in bonds for an equity stake and bonds that mature in 2021. This would extend their maturity by two years.

J Crew to undertake debt restructuring

The retailer, facing a total debt load of $2.1bn, asked creditors to agree to an out-of-court restructuring, allowing J Crew more time to turn around its business and boost declining sales.

Now, the company says it has currently received consents from holders representing more than 80% of the term loan, and direction will be given by the requisite lenders to the term loan agent to "immediately stay all litigation activities" regarding J Crew's intellectual property transactions that occurred in December 2016.

"Upon the satisfaction of all conditions to the effectiveness of the term loan amendment, the direction will require the term loan agent to withdraw and dismiss, with prejudice, all pending litigation, including any claims that were or could have been asserted between the company and the term loan agent," it said in a statement.

As previously announced, the company views these transactions as strategically important to its overall effort in positioning J Crew for long-term success.  Addressing the nearest-term maturity removes an overhang in a challenging market environment and provides the company a "clear and more confident" path to execute its business plan, it said.