COVID-19

J. Crew is the first major retailer to file for bankruptcy under COVID-19

David Brancaccio, Nova Safo, and Alex Schroeder May 4, 2020
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J. Crew has almost $1.7 billion in debt its restructuring. Jeenah Moon/Getty Images
COVID-19

J. Crew is the first major retailer to file for bankruptcy under COVID-19

David Brancaccio, Nova Safo, and Alex Schroeder May 4, 2020
J. Crew has almost $1.7 billion in debt its restructuring. Jeenah Moon/Getty Images
HTML EMBED:
COPY

J. Crew has entered bankruptcy protection, the first major retail chain to do so during this COVID-19 era. The company is restructuring its debt — it has almost $1.7 billion worth.

J. Crew announced Monday morning that it’s reached a deal to turn over the keys to its lenders. They’ll take control of the company.

The company says its online operation will continue as usual, and that it still plans to reopen the stores of both J. Crew sand Madewell, which is a brand the company also owns, as pandemic shutdowns ease.

It’s difficult to predict where other brands might be headed, even as COVID-19 restrictions ease further. Look at Sears: It went into bankruptcy and came out the other side. It’s smaller and has fewer stores, but it’s still around.

Sales are, however, down across retail. They took a historic downturn — dropping almost 9% — in March, and that’s when stores were still open at least some part of the month.

Analysts expect other retail bankruptcies coming from brands that were already struggling pre-pandemic. J. Crew is one of them — sales were down 4% last year.

Other brands analysts are watching include J.C. Penney, the luxury retailer Neiman Marcus and GNC, the nutrition supplements store.

COVID-19 Economy FAQs

What’s the latest on the extra COVID-19 unemployment benefits?

As of now, those $600-a-week payments will stop at the end of July. For many, unemployment payments have been a lifeline, but one that is about to end, if nothing changes. The debate over whether or not to extend these benefits continues among lawmakers.

With a spike in the number of COVID-19 cases, are restaurants and bars shutting back down?

The latest jobs report shows that 4.8 million Americans went back to work in June. More than 30% of those job gains were from bars and restaurants. But those industries are in trouble again. For example, because of the steep rise in COVID-19 cases in Texas, Gov. Greg Abbott, a Republican, increased restrictions on restaurant capacities and closed bars. It’s created a logistical nightmare.

Which businesses got Paycheck Protection Program loans?

The numbers are in — well, at least in part. The federal government has released the names of companies that received loans of $150,000 or more through the Paycheck Protection Program.

Some of the companies people are surprised got loans include Kanye West’s fashion line, Yeezy, TGI Fridays and P.F. Chang’s. The companies you might not recognize, particularly some smaller businesses, were able to hire back staff or partially reopen thanks to the loans.

You can find answers to more questions on unemployment benefits and COVID-19 here.

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