Many major department stores plan to file for bankruptcy with shops shut for weeks, employees flourished and sales collapsed. Clothing store J is the first large retailer to be victims of the pandemic. Crew that submitted bankruptcy for Chapter 11.
J. Crew Group Inc. sought bankruptcy protection after shutting 500 stores worldwide. As per a court filing by Michael J. Nicholson, the company’s chief operating officer, the significant financial strain caused by COVID-19 will cost the company $900 million in sales due primarily to store closures across all brands. The company reached a debt restructuring support agreement with its lenders and has also secured $400 million of new money financing commitments.
JC Penney shares also fell by almost 80 percent this year as its stores closed nationally during the pandemic with a sharp decrease in sales. Bankruptcy is among the many options on the table to make a company sustainable and profitable, but no decision has been taken at this stage. Before the pandemic hit, the company was in the middle of a major reversal. The “strategic decision” has now been made to slack out a bond interest payment due 15 April. It has 30 days to explore and review its options with lenders.
According to the lenders, private property Neiman Marcus is expected to file early for bankruptcy. In the middle of March, it closed its 40 stores throughout the United States, including Bergdorf Goodman. According to the S&P Global Ratings, the company also had issues before the pandemic: 4.8 billion dollars in outstanding debt.