J.Crew Group filed for Chapter 11 bankruptcy protection in  May

J.Crew Group filed for Chapter 11 bankruptcy protection in May

US apparel retailer J.Crew Group says its emergence from Chapter 11 is likely to take place in early September after its reorganisation plan was confirmed by a US bankruptcy court. 

The plan was accepted by the court for the Eastern district of Virginia and will equitise over US$1.6bn of secured indebtedness. It will also provide a $400m exit ABL facility and $400m of new term loans.

As a result, J.Crew expects to emerge from Chapter 11 early next month, after it has satisfied the customary conditions to the effectiveness of the plan.

"The confirmation of our plan of reorganisation is another significant milestone in our path to transforming our business to drive long-term, sustainable growth for J.Crew and further advance Madewell's growth momentum," says CEO Jan Singer. "As we move towards emergence, we look forward to continuing to position J.Crew and Madewell for long-term success."

The retailer was one of the first industry names to file for Chapter 11 bankruptcy protection amid the impacts of the Covid-19 pandemic.

Its filing in May came as part of an agreement to hand over control to its top lenders and saw Madewell – which the group had been planning to spin off through an initial public offering (IPO) – remain part of the company, with Libby Wadle continuing in her role as CEO of Madewell. 

A number of retailers have succumbed to bankruptcy during the pandemic, including Tailored Brands, Ascena Retail Group, and, most recently, Stein Mart and fashion rental subscription service Le Tote and department store Lord & Taylor.