Here’s another blow for some Indian apparel exporters! J. Crew has finally filed for bankruptcy.
US-based multi-brand, multi-channel, speciality retailer J. Crew has been one of the major clients for few Indian apparel exporters as it used to source more than US $ 20 million of garments per year.
There are around 7-8 apparel exporters in India who are associated with this US retailer. Notably, companies like Orient Craft (knits division) and many more are some of the leading suppliers of J. Crew.
“We are worried as not only J. Crew, but also brands/companies like Gap, JCPenney and Ann Taylor, among others, are in the same queue. And all these are major clients,” shared an exporter on the condition of anonymity. He also added that though overall business of J. Crew with India was reducing, every order it was placing was worthy.
Offering apparels, shoes and accessories to men, women and children, the Group operates 181 J. Crew retail stores, 140 Madewell stores and 170 factory stores. US media is describing it as the first major retail casualty of the pandemic.
It has listed both assets and liabilities in the range of US $ 1 billion to US $ 10 billion in the voluntary Chapter 11 document.
The company has announced that it has reached an agreement with its lenders holding approximately 71 per cent of its term loan and approximately 78 per cent of its IPCo Notes, as well as with its financial sponsors, under which the company will restructure its debt and deleverage its balance sheet, positioning J. Crew and Madewell for long-term success.
Under the terms of the Transaction Support Agreement (‘TSA’), the company’s lenders will convert approximately US $ 1.65 billion of the company’s debt into equity.
“We will continue to provide our customers with the exceptional merchandise and service they expect from us, and we will continue all day-to-day operations, albeit under these extraordinary COVID-19-related circumstances. As we look to reopen our stores as quickly and safely as possible, this comprehensive financial restructuring should enable our business and brands to thrive for years to come,” said Jan Singer, CEO, J. Crew Group.
