The coronavirus pandemic has led to many businesses suffering financial hardships, with retailer J.Crew now filing for bankruptcy due to the circumstances. In an announcement made on Monday, J.Crew Group — which also operates Madewell — revealed it has begun the process of filing Chapter 11 bankruptcy. This marks the first instance of a national US retailer filing for bankruptcy protection since the coronavirus became an official pandemic.
In a statement, Jan Singer — Chief Executive Officer of the J.Crew Group — said, “This agreement with our lenders represents a critical milestone in the ongoing process to transform our business with the goal of driving long-term, sustainable growth for J.Crew and further enhancing Madewell’s growth momentum. Throughout this process, we will continue to provide our customers with the exceptional merchandise and service they expect from us, and we will continue all day-to-day operations, albeit under these extraordinary COVID-19-related circumstances. As we look to reopen our stores as quickly and safely as possible, this comprehensive financial restructuring should enable our business and brands to thrive for years to come.”
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“J.Crew and Madewell are two classic American brands with deeply loyal customers,” added Kevin Ulrich, Chief Executive Officer of Anchorage Capital Group. “We look forward to supporting Jan, Libby and the management team to recognize their full potential. The significant deleveraging contemplated by this agreement, coupled with J.Crew Group’s strategy to strengthen its robust e-commerce platform to drive continued growth in its direct-to-consumer segment, will position the Company for future success.”
Another major U.S. business that has been significantly impacted by the coronavirus pandemic is Best Buy. While the company has not been forced to file for bankruptcy, it did have to furlough roughly 51,000 hourly employees. Best Buy CEO Corie Barry issued a statement to employees in April, explaining what was to come. “The situation we are all facing as a result of the COVID-19 pandemic is truly unprecedented,” Barry said. “As we previously communicated, we made the decision for the health and safety of our customers and employees to shift our stores to a temporary enhanced curbside service-only model starting March 22. At that time, we also suspended all in-home delivery, installation and repairs. I am so incredibly proud of our teams’ execution – they seamlessly implemented a new and highly effective operating model in a matter of 48 hours across our entire store base.”
Barry went on to say, “We are fulfilling essential technology needs for customers in a safe and innovative way, including continuing to provide remote technical advice and support. This time of working, learning, cooking, entertaining and, importantly, connecting across the country from home only underscores our strategy and purpose: to enrich lives through technology. We have retained approximately 70% of our sales1 compared to last year since moving to our enhanced curbside service model despite the fact that all our Domestic stores are closed to customer traffic and approximately 40 of them, particularly in the Northeast, have been completely closed to all business for at least 10 days at our discretion. This is a testament to the strength of our multi-channel capabilities – as our Domestic online sales are up over 250% and approximately 50% of these sales are from customers choosing to pick up their products at our stores since moving to our curbside service model.”
She added, “The situation remains very fluid and there is still a great deal of uncertainty, particularly as it relates to depth and duration of store closures and consumer confidence over time. We are taking the steps necessary to resume providing our customers in-home services in the near future, keeping in mind our overriding priority on the safety of our employees and customers. We are also preparing to re-open stores to customers as soon as it is safe to do so, with timing likely to vary at state and local levels.” Barry concluded her statement by saying, “In the meantime, as you would expect, we are focused on making the difficult decisions necessary to ensure that at the end of this crisis Best Buy remains a strong, vibrant company.”
