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
Are states ready to roll out COVID-19 vaccines?
Claire Hannan, executive director of the nonprofit Association of Immunization Managers, which represents state health officials, said states have been making good progress in their preparations. And we could have several vaccines pretty soon. But states still need more funding, she said. Hannan doesn’t think a lack of additional funding would hold up distribution initially, but it could cause problems down the road. “It’s really worrisome that Congress may not pass funding or that there’s information circulating saying that states don’t need additional funding,” she said.
How is the service industry dealing with the return of coronavirus restrictions?
Without another round of something like the Paycheck Protection Program, which kept a lot of businesses afloat during the pandemic’s early stages, the outlook is bleak for places like restaurants. Some in the San Francisco Bay Area, for example, only got one week of indoor dining back before cases rose and restrictions went back into effect. Restaurant owners are revamping their business models in an effort to survive while waiting to see if they’ll be able to get more aid.
How are hospitals handling the nationwide surge in COVID-19 cases?
As the pandemic surges and more medical professionals themselves are coming down with COVID, nearly 1 in 5 hospitals in the country report having a critical shortage of staff, according to data from the Department of Health and Human Services. One of the knock-on effects of staff shortages is that people who have other medical needs are being asked to wait.
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