J.Crew Group is actively exploring a potential initial public offering (IPO) for its Madewell business, it said in a release on Thursday. The company also mentioned that if pursued then the IPO could be completed as early as the second half of 2019.
For the same, the company is also consulting with its legal and financial advisors.
J.Crew believes that an IPO will maximise the value, position both the J.Crew and Madewell brands for long-term growth, and deleverage as well as strengthen the company’s balance sheet. The clothing company’s top priority this year is to return its flagship brand to profitability and sustain momentum for its quickly growing Madewell apparel business.
According to a Reuters report, the company carries a debt load exceeding US $1.7 billion and is currently not looking at the bankruptcy option.
In a separate announcement, Michael J. Nicholson, President & COO, has been named Interim Chief Executive Officer of J.Crew Group, effective immediately. Additionally, Jack Weingart, Co-Managing Partner of TPG Capital, has been appointed to the Company’s Board of Directors, replacing Carrie Wheeler, who will be transitioning off the Board after eight years with the Company. Michael’s appointment replaces the Office of the CEO, previously comprised of four executives, which has led the Company since November 2018.
“I look forward to working with the Board of Directors and our team to build on the decisive actions we have taken to date to refocus our strategy and improve performance in 2019 with the goal of returning J.Crew to profitability, while working with Libby to continue the strong growth at Madewell,” commented Michael. “We believe a potential IPO of Madewell, which had another record year of performance in 2018, could unlock significant value and generate meaningful proceeds that would strengthen our balance sheet and increase our overall financial flexibility to address our 2021 debt maturities, giving us an improved platform to support J.Crew’s turnaround and allowing Madewell to achieve its full potential over the long-term,” he added.
Libby Wadle will continue as President & CEO of Madewell, and Lynda Markoe will continue as the Chief Administrative Officer of the Company. Both Michael and Libby will report to the Board of Directors. At the same time, Adam Brotman, President & CEO, has decided to resign from his position for personal reasons and will be leaving the Company effective April 19, 2019.
