With joblessness climbing past climbing to record numbers, as 3.8 million American workers who recently lost their jobs applied last week for unemployment benefits, bringing a record number of layoffs during the coronavirus crisis to about 30 million in less than two months, now another issue has begun to plague markets as well: bankruptcy.
American retail behemoths appear to be at heightened risk right now, with some already succumbing to the economic fallout from the coronavirus pandemic. Sears, JCPenney, J.Crew, and others may not be able to endure the wrath of the coronavirus even though these companies were robust enough to survive wars, the Great Depression, the Great Recession, and the rise of online shopping.
J.Crew Group Inc. gained momentum in the 1990s when preppy style become a hallmark in malls across America. The company has struggled in recent years, however.
The retailer filed for chapter 11 protection in U.S. Bankruptcy Court in Richmond, Va., after reaching a deal with a group of lenders and bondholders to swap about $2 billion in debt for an 82% stake in the reorganized J.Crew.
“This process gives the company a chance to survive. However, that survival is not just dependent on reduced debt; it requires a reinvention of the J.Crew brand,” said Neil Saunders, an analyst at GlobalData Retail.