The parent company of J.Crew Group, Inc.—Chinos Holdings, Inc.—has filed for Chapter 11 relief in U.S. Bankruptcy Court for the Eastern District of Virginia. The organization announced the news on Monday.
J.Crew is one of the first national retailers to file for bankruptcy protection amid the global coronavirus pandemic.
Under the agreement, the company's lenders will convert approximately $1.65 billion of the debt into equity. In addition, it's obtained commitments for financing of $400 million from Anchorage Capital Group, L.L.C., GSO Capital Partners and Davidson Kempner Capital Management LP and others.
Madewell will also remain part of J.Crew Group, Inc.
"This agreement with our lenders represents a critical milestone in the ongoing process to transform our business with the goal of driving long-term, sustainable growth for J.Crew and further enhancing Madewell's growth momentum," Jan Singer, CEO of J.Crew Group, said in a statement via a company press release. "Throughout this process, we will continue to provide our customers with the exceptional merchandise and service they expect from us, and we will continue all day-to-day operations, albeit under these extraordinary COVID-19-related circumstances. As we look to reopen our stores as quickly and safely as possible, this comprehensive financial restructuring should enable our business and brands to thrive for years to come."
J.Crew faced challenges before the pandemic. For instance, according to multiple outlets, including CBS News and The Washington Post, a portion of its debt stemmed from a leveraged buyout by TPG Capital and Leonard Green & Partners in 2011.
The brand has been worn by several stars, including former First Lady Michelle Obama, Duchess of Cambridge Kate Middleton, and Duchess of Sussex Meghan Markle.