The corona virus economic downturn has claimed another major company. J Crew becomes the first major retailer to declare bankruptcy.
The pandemic has been a reality check for the clothing retailer that has been having issues with debt and struggling revenues before the virus.
Other retailers on the brink of Bankruptcy include J.C Penney, Sears and Neiman Marcus.
The retail industry has been in decline for years. The model which has been disrupted by e-commerce seems to have finally hit a coffin.
A $2 Billion debt swap which will be converted into equity and clearing out the equity of TPG and Leonard Green, the Private Equity firms that acquired J.Crew in 2011.
J.Crew employed 13 thousand employees, 11k have been furloughed recently due to the pandemic, also operated 181 J.Crew stores and 140 Madewell stores.
J.Crew was hoping on an Initial Public Offering ( IPO) for its Madewell brand to raise capital and ease it debt obligations. But the poor financial market ended those hopes.