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.