J. Crew is the first major retailer to file for bankruptcy under COVID-19
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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
When does the expanded COVID-19 unemployment insurance run out?
The CARES Act, passed by Congress and signed by President Donald Trump in March, authorized extra unemployment payments, increasing the amount of money, and broadening who qualifies. The increased unemployment benefits have an expiration date — an extra $600 per week the act authorized ends on July 31.
Which states are reopening?
Many states have started to relax the restrictions put in place in order to slow the spread of COVID-19. Although social-distancing measures still hold virtually everywhere in the country, more than half of states have started to phase out stay-at-home orders and phase in business reopenings. Others, like New York, are on slower timelines.
Is it worth applying for a job right now?
It never hurts to look, but as unemployment reaches levels last seen during the Great Depression and most available jobs are in places that carry risks like the supermarket or warehouses, it isn’t a bad idea to sit tight either, if you can.
You can find answers to more questions here.
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