JCrew files for bankruptcy after collapsing under £1.3bn debt mountain
JCrew has filed for bankruptcy after collapsing under a £1.3 billion debt mountain.
The US fashion brand’s lenders will inject £322m of cash and take control of the chain at the same time as cancelling its debt.
The preppy brand, which counts Michelle Obama, Meghan Markle and Pippa Middleton among its high profile fans, has seven UK stores, all in London.
Preppy brand: JCrew counts Michelle Obama, Meghan Markle and Pippa Middleton among its high profile fans
Internationally it has 500 shops, which have been closed by the pandemic, and not all of them are expected to reopen.
The business, founded in 1947 selling cheap women’s fashion marketed via demonstrations in people’s homes, has struggled to keep up with agile online, fast fashion retailers such as Zara, Asos and Boohoo.
In the last few years it has made hundreds of staff redundant, closed stores and, in 2017, avoided bankruptcy with a debt-for-equity swap with bondholders.
The group now taking control is made up of investment firm Anchorage Capital Group, GSO Capital Partners, part of the Blackstone Group, and hedge fund Davidson Kempner Capital Management.
JCrew chief executive Jan Singer said the move was a ‘comprehensive financial restructuring’, which would allow the firm ‘to thrive for years to come’.
She said: ‘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.’
The collapse, the first major casualty in the US market, follows the demise of Laura Ashley, Cath Kidston and Debenhams in the UK.
Experts have said that many more big name brands will fall if Government life support is withdrawn too quickly as shoppers in other countries exiting lockdown have been slow to return to High Street.