J.Crew, Which Has 4 Stores In MD, Files For Bankruptcy

MARYLAND — J.Crew’s parent company said Monday it is filing for Chapter 11 bankruptcy protection amid flagging sales due to the coronavirus pandemic.

The parent company for J.Crew, the preppy clothing retailer with four stores in Maryland, said Monday it has filed for bankruptcy protection — the first major retailer to do so since the coronavirus pandemic began and caused businesses to close their doors.

J.Crew Group, which also operates the Madewell brand of clothing, estimated in a Chapter 11 bankruptcy filing in the U.S. Bankruptcy Court for the Eastern District of Virginia that it had assets and liabilities of between $1 billion and $10 billion

In Maryland, J.Crew has stores at:

• 10300 Little Patuxent Pkwy., Columbia
• Harbor East: 120 International Drive, Baltimore
• 7101 Democracy Boulevard, Bethesda
• Towson Town Center: 825 Dulaney Valley Road, Towson

Even before boutiques and malls were shutdown by the coronavirus outbreak, traditional brick-and-mortar establishments saw a nosedive in revenue and popularity with the emergence of e-commerce companies such as Amazon and Walmart. In the past six months Macy's said it plans to close 125 stores over the next three years, while two GAP stores closed at the Avenue West Cobb, 3625 Dallas Highway in Marietta; and Oglethorpe Mall, 7804 Abercorn St. in Savannah.

J.Crew’s lenders have agreed to convert $1.65 billion of its debt into equity, and the company has secured commitments for financing $400 million from its existing lenders, Anchorage Capital Group LLC, GSO Capital Partners and Davidson Kempner Capital Management LP, among others.

The company’s Madewell denim brand, which had been slated to begin public trading before the pandemic hit, is expected to remain part of the business. The company had hoped to use the proceeds of the initial public offering to pay down its debt.

J.Crew was in trouble before the seismic shifts in the retail industry brought on by the coronavirus business closings.

TPG Capital and Leonard Green & Partners acquired the company for $3 billion in 2011. Retail veteran Mickey Drexler led it for more than a decade, and it became a valued brand, spurred partially by former first lady Michelle Obama, who famously sported J.Crew slim skirts and cardigans in her eight years in the White House.

Drexler severed his ties with the retailer in January 2019.

J.Crew will continue to operate online during the bankruptcy proceedings, according to a statement on the J.Crew Group website.

The company said it hopes to reopen the bricks-and-mortar stores once coronavirus restrictions are lifted and it is safe to do so.

Last year, J.Crew sales were $2.5 billion, a 2 percent increase from 2018.

The company began in 1983 as a catalog retailer, then opened its first store in New York City in 1989. As of Feb. 1, there were 193 J.Crew stores, 172 J.Crew factory outlets and 132 Madewell locations.

Other chains that are closing some or all of their Maryland stores include Pier 1 Imports, Bed Bath & Beyond, Sears, Kmart, Motherhood Maternity, Dressbarn and more.

Pier 1 closed half of its stores to "better align its business with the current operating environment." Nine Maryland stores, including shops in Nottingham, Rockville and Gambrills, were removed from the chain's website. The company confirmed on social media the stores removed from the website were slated for closure. Patch has posted the full list of the Maryland Pier 1 stores expected to close.

Macy's in February said it would close at least one of its 16 stores in the state.

A record 9,300-plus store closings were announced in 2019, and that number could be even higher in 2020, according to a report by Business Insider.

The news is a continuation of the recent climate for brick-and-mortar stores across America. A record 9,300-plus store closings were announced in 2019, and that number could be even higher in 2020, according to a report by Business Insider.

Related:

• Maryland Chain Retailers That Closed Stores In 2019
• Macy's Closing More Stores, 16 MD Locations Threatened
• Gymboree Relaunches Children's Clothing Line In MD Malls
• MD Retail Apocalypse: Another Chain Closing All Stores