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J.Crew Group Inc., the preppy retailer that recently fell on hard times, is preparing to file for bankruptcy protection, one of several high-profile U.S. chains that are on the verge of unraveling during the coronavirus pandemic, WSJ Pro Bankruptcy reported. J.Crew has been in talks with a group of lenders for several weeks since the company was forced to cancel plans to take its Madewell subsidiary public. The company had planned to use the proceeds of the Madewell IPO to pay down part of its $1.7 billion debt. But the IPO plans were scrapped in March. A deal hasn’t been reached with lenders and the retailer’s board hasn’t signed off on any plan. J.Crew, which was taken private in a leveraged buyout in 2010, has struggled in recent years with fashion missteps and its debt load as more people shifted to fast-fashion chains and online shopping. It narrowly avoided bankruptcy as part of a 2017 debt swap, and the company’s longtime leader Mickey Drexler stepped aside as CEO in that same year.

Brooks Brothers Inc., the two-century-old menswear company that set the standard for aspiring Wall Street bankers, is seeking to sell itself, Bloomberg News reported. The retailer has extended a sale process begun last year. Depending on how many stores a buyer wanted, a transaction could ultimately be part of a bankruptcy filing. The company has about $600 million in debt. Many of the company’s approximately 250 U.S. locations have struggled. It operates a similar number of stores in more than 40 other countries, according to its website.

Macy's plans to reopen 68 stores on Monday in states that have loosened restrictions and Chief Executive Jeff Gennette said he expects to have all the company's roughly 775 stores reopened in six weeks, if state and local governments allow it, the Wall Street Journal reported. The shopping experience will be very different however. Macy’s beauty departments will offer “no-touch” consultations. Customers will be required to use hand sanitizer before trying on jewelry and only a handful of fitting rooms will be open at a time. Plexiglass will be installed at cash registers. Other retailers are also adapting. Best Buy will open about 200 stores in May to shoppers who make appointments for in-store consultations to buy appliances or electronics. Costco Wholesale, whose stores have remained open during the pandemic, will require customers to wear face coverings to shop starting next week.

Fast casual restaurant Cosi sued the Small Business Administration yesterday, alleging it illegally denied its $3.7 million emergency loan request on grounds that the company is currently undergoing bankruptcy proceedings, Yahoo Finance reported. The Charlestown, Mass.-based flatbread chain filed a lawsuit yesterday in the U.S. Bankruptcy Court for the District of Delaware, arguing that the company should be eligible, under the CARES Act, to apply for Paycheck Protection Program loans designed to help small businesses keep employees on payroll amid the novel coronavirus. In a five-count complaint, requesting that the court enjoin the SBA from excluding Cosi and other bankruptcy debtors from access to PPP funds, the food chain alleges that the exclusion is discriminatory, exceeds authority under the CARES Act, and is arbitrary and capricious. “No law, regulation, or rule of any kind disqualifies, or authorizes the SBA to disqualify, bankruptcy debtors from participating in the PPP,” the complaint states. According to Cosi, holding back PPP funds from companies in bankruptcy runs counter to the stated purposes of the CARES Act. Cosi filed for chapter 11 bankruptcy on Feb. 24, before the number of coronavirus cases exploded in the U.S.

Bankrupt Pier 1 Imports Inc. said it hopes to reopen a “critical mass” of its stores by June 1, the latest company getting ready for the possibility of welcoming back shoppers as more states relax stay-at-home restrictions, the Wall Street Journal reported. The home-goods retailer, pressed by a bankruptcy judge yesterday to be more specific, said that it would resume its brick-and-mortar operations if enough states allow the company to reopen at least half of its roughly 540 stores. The company said that it would also depend on whether reopening would be economically feasible and whether it has the supply chain in place to support operations without losing money. Pier 1, which filed for chapter 11 bankruptcy in February, won approval from the U.S. Bankruptcy Court in Richmond, Va., to continue suspending payments to landlords, suppliers and shippers until May 31 amid the economic fallout from the coronavirus pandemic. Bankruptcy Judge Kevin R. Huennekens said yesterday that he would approve Pier 1’s extension request despite several landlords that objected and expressed frustration that they wouldn’t receive rent for another month. Lawyers for the landlords said that they worried there is a risk that Pier 1, of Fort Worth, Texas, could be left unable to pay the bills it racks up during the chapter 11 process. “The world has been turned upside down as a result of this pandemic and we gotta deal with it,” Judge Huennekens said at the hearing, which was conducted by telephone conference. Pier 1 “has mapped a clear path forward, which is what I asked them to do.”

CBL & Associates Properties Inc. hired Moelis & Co. and Weil Gotshal & Manges as it seeks advice on strategic and financing options including restructuring, Bloomberg News reported. The owner of shopping malls is exploring ways to recapitalize including an exchange offer, in which senior holders of unsecured debt swap their investments for secured debt. The Chattanooga, Tennessee-based company may also discuss a chapter 11 bankruptcy filing as a last resort. A group of CBL’s creditors has hired advisers including PJT Partners Inc. and Akin Gump Strauss Hauer & Feld. The real estate investment trust’s shares fell as much as 11 percent yesterday. They have dropped 68 percent this year, cutting the company’s market capitalization to $63 million. CBL operates more than 100 properties across 26 states, most of which are so-called Class B malls, and has been hurt in part by the closures of retailers including Forever 21. Its top tenants based on revenue at year-end included L Brands Inc., Signet Jewelers Ltd., Foot Locker Inc., a unit of American Eagle Outfitters Inc., Dick’s Sporting Goods Inc. and Ascena Retail Group Inc., filings show. CBL said this month that it was taking actions to offset the anticipated impacts of the COVID-19 pandemic on revenue and cash flow. Chairman Charles Lebovitz, Chief Executive Officer Stephen Lebovitz, President Michael Lebovitz and independent directors agreed to reduce their salaries and fees by 50 percent.

An investor group that comprises investment firm Mudrick Capital Management LP and Daniel Loeb’s hedge fund Third Point LLC plans to challenge a $600 million financing package that Neiman Marcus Group has lined up for its looming bankruptcy, and will push the U.S. department store operator to sell itself, Reuters reported. Neiman Marcus is preparing to seek bankruptcy protection in a Dallas federal court as soon as Monday, the sources said. The debt-laden company’s sales all but evaporated after the coronavirus outbreak forced it to temporarily shut all 43 of its Neiman Marcus locations, roughly two dozen Last Call stores and its two Bergdorf Goodman stores in New York. The location and timing of the bankruptcy filing had not been finalized as of yesterday. Mudrick submitted a $700 million proposal for so-called debtor-in-possession (DIP) financing to Neiman Marcus in recent days, the sources said. In addition to Third Point, hedge fund Fir Tree Partners is also likely to be part of the group proposing the financing. Neiman Marcus plans to instead use a $600 million loan it spent weeks negotiating with creditors that include Pacific Investment Management Co, Davidson Kempner Capital Management LP and TPG’s Sixth Street Partners. Neiman Marcus over the weekend was close to completing negotiations for that financing to help sustain its operations while it navigates bankruptcy proceedings, some of the sources said. The company’s current plan calls for creditors to forgive most of the $5 billion in Neiman Marcus’s debt in exchange for taking ownership of the retailer.

J.C. Penney Co., battered by missteps and the rise of e-commerce, is on the verge of being done in by the coronavirus, the Wall Street Journal reported. With nonessential shopping largely shut down across the U.S., the department-store chain is in advanced talks with bank lenders for a bankruptcy loan as large as $1 billion to carry it through a potential chapter 11 process. The store shutdowns have choked off revenue, putting more pressure on the company’s lopsided balance sheet. After years of falling sales, red ink and failed turnaround efforts, the coronavirus pandemic is hastening a reckoning with creditors over Penney’s $3.7 billion in debt. The company has said in private negotiations it wants to reorganize as a viable business and has proposed handing control to lenders. Retailers have difficulty shrinking themselves back to health, according to analysts, and are more likely than other types of companies to simply liquidate through bankruptcy instead of getting back to business. “The answer doesn’t lie in massive store closings,” said Steve Dennis, president of SageBerry Consulting. “If your fundamental issue is you aren’t relevant with customers, having fewer stores doesn’t solve that problem.”