Struggling US women's wear retailer J.Jill Inc has completed a financial restructuring transaction that helped it to avoid bankruptcy.

The transaction, which closed yesterday (30 September), provides the company with no less than US$15m of new capital and extends the maturity of certain participating term loan debt to May 2024.

The deal is expected to provide J.Jill with the financial flexibility to continue to meet its obligations to its vendors in full and continue to execute on its business plan.

"While we were working closely with our lenders to complete our financial restructuring, we were also examining our operating model to identify efficiencies by rationalising the number of floorsets, catalogues, and style count, allowing us to focus on our inventory management and ultimately enhance overall profitability going forward. By shifting certain roles and responsibilities and eliminating open positions, we were able to minimize furloughs and headcount reductions as we managed through these challenging times," said CEO Jim Scully.

"Despite the ongoing challenges of the pandemic, we believe that J.Jill has the financial flexibility, with an enhanced operating model, a strong direct business, loyal customers, and a dedicated team to drive sustainable results for our shareholders."

The restructuring was approved by a majority of the retailer's lenders last month in a move that meant it could avoid filing for bankruptcy.

Unless it secured at least 95% support, J.Jill would have had to file a prepackaged plan of reorganisation under Chapter 11 – the key terms of which had been negotiated.

For the first half of its financial year, the retailer's total net sales were down 49% to $183.6m from $357.2m the year before, while net loss narrowed slightly to $88.8m from $92.4m. 

A number of retailers have succumbed to bankruptcy during the pandemic, including US men's wear retailer Brooks Brothers, Tailored Brands, and more recently, Stein Mart and fashion rental subscription service Le Tote and department store Lord & Taylor.