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Law360 (May 4, 2020, 9:07 AM EDT ) J.Crew on Monday became the first major retailer to file for Chapter 11 protection during the coronavirus pandemic, saying it has reached a $1.65 billion debt-for-equity agreement with lenders.
Retail giant J.Crew on Monday filed for Chapter 11 bankruptcy protection amid the COVID-19 pandemic. (AP)
"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," Jan Singer, who came on as J.Crew's CEO at the end of January, said in the statement.
The proposed DIP package would be provided by prepetition lenders Anchorage Capital Group LLC, GSO Capital Partners and Davidson Kempner Capital Management LP, among others, the statement said.
"The significant deleveraging contemplated by this agreement, coupled with J.Crew Group's strategy to strengthen its robust e-commerce platform to drive continued growth in its direct-to-consumer segment, will position the company for future success," Anchorage CEO Kevin Ulrich said in the announcement,
Founded in 1947 as a catalog retailer, J.Crew opened its first brick-and-mortar store in 1989. The company currently operates 181 J.Crew stores, 140 stores for its Madewell women's clothing line and 170 factory stores, as well as e-commerce platforms for its brands, according to the announcement.
The company was purchased in 2011 by TPG Capital and Leonard Green & Partners LP for $3 billion.
Late last year it announced it was negotiating a restructuring agreement that would include spinning off its Madewell stores off into a publicly owned corporation, but in Monday's announcement, the company said Madewell will remain part of the company under the proposed plan.
The company said it has retained Lazard as its investment banker and AlixPartners LLP as its restructuring adviser. The ad hoc committee of supporting lenders said it has retained Milbank LLP as legal counsel and PJT Partners LP as its investment banker.
J Crew is represented by Ray C. Schrock, Ryan Preston Dahl, Candace M. Arthur and Daniel Gwen of Weil Gotshal & Manges LLP and Tyler P. Brown, Henry Long III and Nathan Kramer of Hunton Andrews Kurth LLP.
The case is In re: J. Crew Group Inc., case number 20-32185, in the U.S. Bankruptcy Court for the Eastern District of Virginia.
--Editing by Katherine Rautenberg.
Update: This story has been updated with additional information.
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