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Monday Coronavirus Update: J. Crew Files Bankruptcy

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Good morning, it’s Monday, May 4. 

Here’s your daily coronavirus update.

There are over 3.5 million cases of the virus worldwide, with over 247,000 deaths per data from Johns Hopkins.

The U.S. has over 1.1 million cases and over 65,000 deaths.

President Donald Trump, in an interview Sunday, acknowledged that the death toll could be as high as 100,000.

New York has 316,000 cases and 19,000 deaths. And Spain has 217,000 cases with over 25,000 deaths.

On the business side, the first retail coronavirus victim is J. Crew, which filed for bankruptcy Monday morning.

The company saw a steep drop-off in sales, but the $1.65 billion debt load was one of the root causes for the filing.

The debt load came from a leveraged buyout long ago that was supposed to help the retailer turn back around.

J.Crew said, in a statement, that it has reached a deal with a majority of its lenders to convert $1.65 billion of debt into equity, which it will then use to liquidate its holdings, including existing stock and other assets, to pay back lenders and extract itself from leases and other obligations

The clothing retailer was able to avoid defaulting in 2017 by conducting a financial overhaul and shifting assets--including Madewell. Prior to the pandemic, J. Crew was mulling an IPO of Madewell to help raise capital.

Madewell will remain part of J.Crew as part of the transaction support agreement the company reached with its lenders, according to the statement.

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