The U.S. Bankruptcy Court for the Eastern District of Virginia has approved the J.Crew Group reorganization plan, paving the way for the parent company of J.Crew, J.Crew Factory and Madewell to emerge from Chapter 11 in early September.
J.Crew was an early casualty in what has become a long list of retailers that have filed for bankruptcy in the wake of COVID-19. However, the company had “a prearranged reorganization plan ready at the time of its filing, allowing it to move through the process faster than some of its peers,” according to Westlaw Today.
As announced in its initial bankruptcy filing in May, J.Crew’s lenders have agreed to convert approximately $1.65 billion of the company’s secured debt into equity. The plan provides $400 million in exit financing and $400 million in new term loans.
J.Crew Group has reached agreements with its landlords to improve lease terms for its stores, anticipating savings of approximately $70 million in 2020 and approximately $60 million in 2021.
Since the bankruptcy filing, the company has trimmed the number of J. Crew stores from 181 to 170, and continues to operate 141 Madewell stores and the J.Crew, Madewell and J.Crew Factory e-Commerce sites, according to Bloomberg.
“The confirmation of our plan of reorganization 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,” said Jan Singer, CEO of J.Crew Group in a statement. “We thank our associates, customers, vendors, landlords and lenders for their support, which has enabled us to efficiently move through this process while navigating our business through the current environment.”