J. Crew and Brooks Brothers are among the latest retailers on the brink of bankruptcy.
J. Crew, which has 322 stores, is seeking $400 million in financing to fund operations during bankruptcy, CNBC reported. And Brooks Brothers is seeking to sell itself, a deal that could potentially be part of a bankruptcy filing, according to Bloomberg.
J. Crew, whose holdings include retailer Madewell, was struggling before the coronavirus sent shoppers home in March. The company saw “meaningful improvement” in its 2019 business, according to Moody’s, compared with the prior year, but as of February it had $93 million in total liquidity as debts came due. TPG Capital and Leonard Green & Partners bought the company in 2011 for $3 billion.
Similarly, Brooks Brothers’ woes predate the health crisis. The Wall Street favorite has $600 million in debt and many of its 250 U.S. locations were also struggling before the pandemic, sources told Bloomberg. Its attempt at a sale began last year.
The pandemic has exacerbated retailers’ financial problems. High-end department store Neiman Marcus is also nearing bankruptcy, though a group of its investors are pushing for the firm to seek a sale. J.C. Penney, too, is in talks with its lenders for at least $800 million in bankruptcy financing. [CNBC, Bloomberg] — Georgia Kromrei