Along with hundreds of other brick-and-mortar businesses, J.Crew closed numerous stores in March — 500, in its case — and furloughed 11,000 employees as state governors issued orders to close nonessential businesses to curb coronavirus infection rates, NBC.com reported. It expects to lose $900 million in sales because of the store closings, according to a filing in U.S. Bankruptcy Court in Richmond, Virginia, by Michael Nicholson, the company's chief operating officer. A chapter 11 filing doesn't mean your favorite store is about to disappear. Instead, chapter 11 offers a company a way to reshape the business by reorganizing debt and eliminating costly real estate, said Kevin Carey, a former bankruptcy judge and partner with the Hogan Lovells law firm. Chinos Holdings, which runs 182 J.Crew stores, 140 Madewell stores and 170 J.Crew Factory stores, said the restructuring won't change much for shoppers. Its customer programs, including any loyalty programs, gift cards and returns and exchanges, will operate as usual, the company said. That store credit card bill also won't disappear, said Ken Rosen, a financial restructuring partner at Lowenstein Sandler. "Bankruptcy will give no relief to a consumer who owes money on a credit card," he said. The uncertainties surrounding the virus and the government's economic response make it difficult to estimate how many bankruptcy filings will result from the crisis and when they may happen. But with a growing number of people out of work, it's unlikely that retail will see a fast recovery. "Consumers and businesses face growing financial challenges due to the pandemic, and bankruptcy provides a vital safe harbor from their mounting debts," said ABI Executive Director Amy Quackenboss. "We anticipate business filings to start rising this month and consumer filings to start to accelerate in early summer," she said.
