J.Crew, Which Has 4 Stores In GA, Files For Bankruptcy

ATLANTA, GA — J.Crew’s parent company said Monday it is filing for Chapter 11 bankruptcy protection amid flagging sales due to the coronavirus pandemic.

The parent company for J.Crew, the preppy clothing retailer with four stores in the Atlanta area, said Monday it has filed for bankruptcy protection — the first major retailer to do so since the coronavirus pandemic began and caused businesses to close their doors.

J.Crew Group, which also operates the Madewell brand of clothing, estimated in a Chapter 11 bankruptcy filing in the U.S. Bankruptcy Court for the Eastern District of Virginia that it had assets and liabilities of between $1 billion and $10 billion

In the Atlanta metro, J.Crew has stores at:

• Ponce City Market, 675 Ponce De Leon Ave NE, Atlanta
• Lenox Square, 3393 Peachtree Road, Atlanta
• Perimeter Mall, 4400 Ashford Dunwoody Road, Suite 2416, Atlanta
• Avalon, 3170 Avalon Blvd., Alpharetta

Even before boutiques and malls were shutdown by the coronavirus outbreak, traditional brick-and-mortar establishments saw a nosedive in revenue and popularity with the emergence of e-commerce companies such as Amazon and Walmart. In the past six months Macy's said it plans to close 125 stores over the next three years, while two GAP stores closed at the Avenue West Cobb, 3625 Dallas Highway in Marietta; and Oglethorpe Mall, 7804 Abercorn St. in Savannah.

J.Crew’s lenders have agreed to convert $1.65 billion of its debt into equity, and the company has secured commitments for financing $400 million from its existing lenders, Anchorage Capital Group LLC, GSO Capital Partners and Davidson Kempner Capital Management LP, among others.

The company’s Madewell denim brand, which had been slated to begin public trading before the pandemic hit, is expected to remain part of the business. The company had hoped to use the proceeds of the initial public offering to pay down its debt.

J.Crew was in trouble before the seismic shifts in the retail industry brought on by the coronavirus business closings.

TPG Capital and Leonard Green & Partners acquired the company for $3 billion in 2011. Retail veteran Mickey Drexler led it for more than a decade, and it became a valued brand, spurred partially by former first lady Michelle Obama, who famously sported J.Crew slim skirts and cardigans in her eight years in the White House.

Drexler severed his ties with the retailer in January 2019.

J.Crew will continue to operate online during the bankruptcy proceedings, according to a statement on the J.Crew Group website.

The company said it hopes to reopen the bricks-and-mortar stores once coronavirus restrictions are lifted and it is safe to do so.

Last year, J.Crew sales were $2.5 billion, a 2 percent increase from 2018.

The company began in 1983 as a catalog retailer, then opened its first store in New York City in 1989. As of Feb. 1, there were 193 J.Crew stores, 172 J.Crew factory outlets and 132 Madewell locations.

Other chains that are closing some of their Georgia stores include Papyrus, a stationery retailer, is closing all of its stores across the country. The chain operated two Atlanta stores at Lenox Square and Phippps Plaza.

Other chains that are closing all or some of their stores include Pier 1 Imports, Bed Bath & Beyond, Sears, Kmart, Motherhood Maternity, Dressbarn and more.

Pier 1 closed half of its stores to "better align its business with the current operating environment." Eleven Georgia stores, including two in Atlanta, one in Decatur, one in Marietta and one in Douglasville, were removed from the chain's website. The company confirmed on social media the stores removed from the website were slated for closure. Patch has posted the full list of the 11 Pier 1 stores expected to close.

Motherhood Maternity: As Destination Maternity continues through its Chapter 11 bankruptcy protection case, the company said it plans to close 201 Destination Maternity and Motherhood Maternity stores across the country, including a handful in Georgia. USA Today reports the company said it plans to close stores at the following locations: Atlanta - Motherhood Maternity; Newnan - Motherhood Maternity; Dawsonville - Motherhood Maternity Outlet; Columbus - Motherhood Maternity; and McDonough - Motherhood Maternity.

Forever 21: In late September, clothing retailer Forever 21 announced that it was filing for Chapter 11 bankruptcy and would be closing two stores in Georgia. These Forever 21 locations were expected to close in Georgia: Stonecrest: 2929 Turner Hill Road N.E #2460, Lithonia; and Savannah Outlets: 200 Tanger Outlets Blvd. Ste. 191, Pooler. Read more.

The news is a continuation of the recent climate for brick-and-mortar stores across America. A record 9,300-plus store closings were announced in 2019, and that number could be even higher in 2020, according to a report by Business Insider

Related:

• Macy's To Close 125 Locations; Georgia Stores Among Threatened
• Georgia Chain Stores That Closed Their Doors In 2019