J. Crew files for bankruptcy, becoming first major retail casualty of pandemic

J. Crew Group Inc. became the first major retail casualty of the novel coronavirus pandemic on Monday, filing for Chapter 11 bankruptcy protection in Virginia.

Per the agreement, the high-end New York-based chain will cede ownership to creditors in exchange for the elimination of roughly $1.65 billion in debt.

J. Crew files for bankruptcy protection https://t.co/7ISB1DUmCF pic.twitter.com/KXuNeEaJ5H
— Reuters (@Reuters) May 4, 2020

According to Reuters, Anchorage Capital Group, Blackstone Group Inc's GSO Capital Partners and Davidson Kempner Capital Management hold significant portions of J. Crew's senior debt and are positioned to take control of the company.

The arrangement allows J. Crew to remain in business, and CEO Jan Singer said in a prepared statement that the company intends to "continue all day-to-day operations, albeit under these extraordinary COVID-19-related circumstances."

In turn, the creditors taking control of the company have agreed to provide about $400 million in financing to cover operations while J. Crew navigates the financial restructuring.

Retail sales nationwide recorded their largest drop on record in March, falling by 8.7%, The Washington Post reported.