Bankrupt retailer J. Crew is saving $130 million in rent.
The retailer, which has 492 stores including Madewell and outlet locations, has negotiated about $70 million in concessions this year and about $60 million next year from its landlords, according to Retail Dive. That includes waivers and rent deferrals, as long as sales are in line with projections.
J. Crew had sought to exit leases through its bankruptcy proceedings, which began in May. Before it filed for Chapter 11, it had been closing J. Crew locations in favor of opening Madewell stores. It is unclear whether that is still the plan.
In bankruptcy court last week, the committee of unsecured creditors claimed that J. Crew and its secured lenders “have grossly undervalued” the business while overvaluing certain collateral, according to Retail Dive. Instead, the committee calculates the company’s enterprise value to be $2.94 billion, not the $1.75 billion or the revised $1.84 billion included in J. Crew’s bankruptcy plans.
As companies increasingly lean towards bankruptcy amid the coronavirus pandemic, landlords have been seeking ways to save businesses while avoiding falling behind on their own mortgages and debts.
Some estimates say that as many as 25,000 retail stores may close as a result of the pandemic.
J.Crew has reopened 458 stores, or about 95 percent of its fleet, in recent months. [Retail Dive] — Sasha Jones