Clothing apparel company J. Crew filed for bankruptcy Monday, marking the first major retail bankruptcy of the coronavirus pandemic.
The New York-based retailer had already been struggling under a heavy debt load and sales challenges, as it suffered criticism that it fell out of touch with its once-loyal customers. In the past few years, the brand lost both its longtime design chief, Jenna Lyons, and famed retail executive Mickey Drexler, who was its CEO.
It was acquired by private equity firms TPG Capital and Leonard Green & Partners for $3 billion in 2011, one of a number of retail acquisitions in that time. Many of those deals, including Payless Shoesource and Toys R Us, have since filed for bankruptcy, as debt limited their ability to manage the retail upheaval that soon followed.
The Associated Press reports:
There are a number of retail chains that were already teetering at the start of the year, but the pandemic is wreaking havoc equally across the entire sector. J.Crew is not the first to seek protection during the coronavirus outbreak, and no one expects it to be the last.
J.C. Penney and Neiman Marcus are expected to follow J.Crew. Jeans maker True Religion Apparel Inc. filed for bankruptcy protection last month. Clothing store sales plummeted 50.5% in March, according to the latest Commerce Department report, and it has grown worse since.
Clothing retailer J.Crew, already in trouble before the coronavirus pandemic and laden with debt, filed for Chapter 11 bankruptcy protection on Monday https://t.co/6wT0C8J3yL
— Chicago Tribune (@chicagotribune) May 4, 2020