Chapter 11 filing is the first by a major US retailer during the coronavirus lockdownThe fashion chain J Crew has became the first major US retailer to file for bankruptcy protection during the coronavirus shutdown.The New York-based brand’s parent company made the Chapter 11 bankruptcy filing in a Virginian federal court to buy itself breathing space as it plans to hand control over to its lenders, in exchange for the cancellation of $1.65bn (£1.3bn) of its debts. J Crew Group’s chief executive described the move as a “financial restructuring” that would enable the business to thrive for years to come. Continue reading...
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Ascena Retail is the latest retailer to fall during the pandemic. The disappearance of 1,600 of...Ascena Retail is the latest retailer to fall during the pandemic. The disappearance of 1,600 of its 2,800 stores is a fresh blow to shopping malls.
If you have a gift card for JCPenney, J. Crew, or another bankrupt retailer, experts say you should use it right away
If you have a gift card to a retailer that has filed for bankruptcy, it's best...If you have a gift card to a retailer that has filed for bankruptcy, it's best to use it right away, according to Darren Azman, partner at McDermott Will & Emery. While most retailers will want to honor gift cards throughout bankruptcy, there are plenty of uncertainties in any restructuring. Shoppers should make sure they're up-to-date on a retailer's policies before planning to use a gift card. Visit Business Insider's homepage for more stories. After a retailer files for bankruptcy, one of the first questions that consumers might have is what to do with any gift cards they have unused. The best thing to do is to use those gift cards right away, according to Darren Azman, a partner at McDermott Will & Emery, a law firm that works with financially distressed companies. Azman said that most retailers will try to honor gift cards throughout the bankruptcy process, as it helps them to maintain goodwill with their customers. "That goodwill is easily lost, as you can imagine, when you start telling customers they have 30 days to use their gift card or some other type of limitation," he said. Some limitations do arise in cases where the retailer is liquidating and positive feelings towards the brand don't matter as much as paying back creditors. Papyrus, for example, which filed for bankruptcy in January and subsequently closed all of its stores, only allowed customers to redeem gift cards for 30 days following its filing. Read more: As J. Crew and Neiman Marcus file for Chapter 11 bankruptcy, an avalanche of retail bankruptcies on the horizon may bury the overloaded bankruptcy court system According to Azman, even if a bankrupt retailer says it will continue to honor gift cards at the beginning of its restructuring, there's not much keeping it from going back to the bankruptcy court and requesting to change course later. "The other level of uncertainty is just the inventory: Is the retailer going to have the product that you still want in two months, three months, when you get around to actually use the gift cards, or are they going to have liquidated their inventory? And there's going to be very, very few things left on the shelf," he said. Ultimately, the onus is on the shopper to be fully informed about stores' policies so that they don't end up with a useless piece of plastic. And with JCPenney, Neiman Marcus, J. Crew, Tuesday Morning, and GNC already having filed for bankruptcy amid the coronavirus pandemic — with more likely on the way — staying up-to-date on store policies is going to be more important than ever.SEE ALSO: These 18 retailers and restaurant chains have filed for bankruptcy or liquidation in 2020 Join the conversation about this story » NOW WATCH: Why thoroughbred horse semen is the world's most expensive liquid
At a time when J. Crew and Neiman Marcus needed to be investing money to adjust...At a time when J. Crew and Neiman Marcus needed to be investing money to adjust to changing shopping habits, enormous sums were going to their owners.