On the 4th local time, J.Crew, a well-known American clothing retailer, officially filed for bankruptcy protection, becoming the first major retailer in the United States to file for bankruptcy protection during this epidemic. The retailer said it had reached a debt restructuring agreement with lenders, agreeing to convert $1.65 billion in debt into equity.
Currently, many major retailers in the United States are on the verge of bankruptcy. How will the retail industry adjust its strategies after that?
CNBC Ye Wenduo: In the United States, J.Crew was once a star brand in the retail industry and was loved by urban white-collar workers. First Lady” Michelle Obama favored and attracted attention.
But for the capital community, its bankruptcy is not surprising.
So far, J.Crew has been losing money for six consecutive years. Affected by the epidemic, it closed approximately 500 stores in March. Due to a huge loss of revenue, the company laid off tens of thousands of employees and decided not to pay rent in April.
According to the bankruptcy application documents submitted, J.Crew estimates that the losses caused by store closures due to the epidemic will be approximately US$900 million.
The company originally hoped to raise funds by spinning off sub-brands and listing them on the market, but the outbreak of the epidemic ruined this plan and J.Crew had to file for bankruptcy protection.
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Public information shows that J.Crew was founded in In 1983, headquartered in New York, J.Crew grew from making clothing that represented the American spirit and fun into a world-famous mid-range clothing group. At that time, J.Crew started with the family mail-order business, relying on diagonal striped cotton and simple and exquisite T-shirts in casual wear. It once dominated the field of services. Favored by former US first lady Michelle Obama, J.Crew suddenly became popular and was snapped up by the American people.
J.Crew’s style of combining classic items with bright colors has caused many brands in the fashion circle to imitate its style. Since 2012, J.Crew has been exhibiting its designs at New York Fashion Week and made a strong return to the Chinese market in the same year. In 1990, J.Crew’s annual sales reached US$400 million. Two years later, through cooperation with Itochu, J.Crew began to enter the Asian market. Later, J.Crew’s territory also expanded to Canada and France.
In 1997, 70-year-old founder Arthur Cinader decided to retire, and he sold a majority stake in J.Crew to TPG Texas Pacific for $560 million. group. Arthur Cinader has died at the age of 90.
On the day when former US President Obama was sworn in, the green gloves worn by his wife Michelle and the coats of their two daughters, one blue and one pink, were all from J.Crew. This brand is officially Promoted to the “national uniform” of the United States. However, the good times did not last long. J.Crew, a once popular fashion brand, now has to face the dilemma of continued decline in sales and profits.
However, due to the pressure of debt and the impact of the epidemic, J.Crew has lost its glory. According to reports, due to the impact of the epidemic, the overall revenue of the U.S. apparel industry fell by as much as 52%.
According to “Women’s Wear Daily” citing sources, J. Crew had previously hoped to save the company through the listing of Madewell, but now this plan has come to nothing.
The COVID-19 epidemic has dealt a severe blow to the U.S. retail industry. The U.S. Department of Commerce previously stated that in March this year, sales of the clothing and accessories sector in the U.S. retail industry plunged 52% year-on-year. , overall retail sales fell by 8.7%, which was the worst data recorded by the U.S. government in the past 30 years.
J. Crew is not the only American retailer struggling during the epidemic.
U.S. department store group Neiman Marcus is preparing to seek bankruptcy protection. Sources said the group is in final negotiations with creditors on a loan totaling hundreds of millions of dollars.
American department store J.C. Penney is considered to be another retail company in danger. As of the end of 2019, J.C. Penney was saddled with $3.7 billion in debt. Fitch Ratings’ David Silverman believes that although J.C. Penney has sufficient liquid assets to survive the next few months, the company will face future debt refinancing. challenge.
J.C. Penney is doing its best to retain Sephora. The company issued a statement on May 4, local time, saying that it had applied for a temporary restraining order to allow Sephora to There’s nothing stopping J.C. Penney from reopening its beauty counters in department stores.
American apparel group GAP has also experienced the pain of the epidemic.
According to a document submitted by GAP Group to the U.S. Securities and Exchange Commission at the end of April, US$1 billion has evaporated from the company’s accounts since February. In order to improve cash flow, GAP Group decided to lay off about 80,000 store employees. took vacations, cut executive compensation, and negotiated with property owners not to pay rent for stores that were temporarily closed in April.
There are also American department stores that are gradually recovering.
On March 30, Macy’s Department Store in the United States announced that because all retail stores across the country have been closed, it decided to temporarily lay off 130,000 people and retain only a few essential personnel. On May 4, Macy’s reopened 68 of its 775 stores and said it would reopen 50 more stores on May 11. </p
