J Crew set to file for bankruptcy protection
J Crew, the preppy fashion retailer, his preparing to file for bankruptcy protection in the US, according to a number of reports.
The brand, best known for its colourful knits and being a favourite with Michelle Obama among other high-profile figures, had lost its way in recent years and had been struggling financially under heavy debts. Its woes have been exacerbated by the global COVID-19 pandemic.
According to CNBC, which first broke the news, the brand is seeking to secure $400 million to fund its operations in bankruptcy. The company is said to have achieved sales of $2.5 billion in the year to 1 February via its 182 J Crew stores, as well as 140 Madewell stores.
In the UK, J Crew has a flagship store on Regent Street as well as branches in Chelsea, Marylebone, Bloomsbury and Shoreditch. Its younger, denim-focused sister brand Madewell signed a distribution deal in the UK with department store John Lewis in March 2018.
J Crew was once led by famed US retail leader Millard "Mickey" Drexler with Jenna Lyons as its high profile design chief, but it was accused of failing to stay in touch with its customer base. Lyons left in April 2017 and Drexler handed over the CEO reins to West Elm’s James Brett shortly after, but remained as chairman.
Brett had attempted to make the brand more accessible and inclusive with a broader sizing range and some lower prices but he fell out with the board on strategy and left in November 2018. He was replaced on an interim basis by COO Michael J Nicholson.
It wasn't until January of this year that a permanent CEO was appointed in the form of former Victoria's Secret chief Jan Singer whose appointment was believed to herald a period of stability before the brand. Singer joined in February, a month before the COVID-19 crisis hit the US and Europe.
The bankruptcy filing may take place as early as this weekend and J Crew finds itself among a number of big US retailers in financial strife. Neiman Marcus and J.C. Penney, which were also both struggling before the crisis, have been brought to the brink as a result. Despite the filing, there is some hope that J Crew, with its direct consumer channels and its strong brands, could yet make it through.