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Clothing Retailer J. Crew Preparing to File for Bankruptcy

The Retailer Operates More than 20 Stores in Southern California

Clothing retailer J. Crew is preparing to file for bankruptcy protection as soon as this weekend. The company is looking to secure about 400 million dollars in financing to keep the company running.

The company, which operates more than 20 Southern California locations under the J. Crew and Madewell banners, has been struggling under heavy debt and with sales for quite a while. The situation got worse due to the COVID-19 outbreak, which has seen many consumers turn to Amazon and other online companies.

The company operates 182 J. Crew retail stores and about 140 Madewell stores. J Crew hoped to spin off its Madewell division in an IPO to help pay down its debt, but creditors objected the move.

According to insiders familiar with the situation, some stores may be forced to downsize their operations, a move that could translate into massive discounts for shoppers, but significant job losses for employees.

According to Lars Perner, an assistant professor of clinical marketing at the USC Marshall School of Business, many retailers are going to go out of business. “Online sales have really hurt these businesses, and coronavirus is the final nail in the coffin,” he said.

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Sacramento Bee Seeks Crowdfunding to Pay for COVID-19 News Coverage

Sacramento Bee is accepting tax-deductible donations to boost its coverage of COVID-19 after the company’s revenue dipped due to the pandemic.

The company kicked off its crowdsourcing campaign on Thursday and had already collected about $20,000 from 306 people on Friday midday. “It’s mostly small donations,” said Lauren Gustus, Sacramento Bee editor.

The McClatchy Co., the newspaper’s parent company which also owns more than 30 newspapers, is in the midst of a bankruptcy auction and recently laid off some staff because of the pandemic-driven economic slowdown.

The donated money is administered through the nonprofit Local Media Foundation, affiliated with Local Media Association based in Lake City, Michigan.

Sacramento Bee is one of the near 200 newspapers that are raising money this way across the country. Local Media Foundation said it had received more than $500,000 over four weeks.

The California News Publishers Association said some newspapers have recorded declines of more than 70% since the pandemic. Two entertainment-oriented publications, the Sacramento News & Review and Submerge, reportedly ceased publishing in March after their revenue from restaurants, pubs and club advertisers plummeted.

The association also announced plans to introduce state legislation called the Save Local Journalism Act of 2020 which seeks to make newspaper subscriptions and advertising tax-deductible expenses. The legislation also seeks to exempt newspapers from paying sales taxes until the industry recovers from the current crisis.