J Crew has announced that it has almost completed an exchange offer in which the company will receive $566.5 million in cash.
According to an article on WWD, J Crew has announced that it has almost completed an exchange offer in which the company will receive $566.5 million in cash. The offer was made with bondholders through in payment-in-kind notes, which the brand will have to pay back in May 2019.
The bondholders have accepted the offer and the brand has already received 93.6% of the notes, or about $530.5 million of the $566.5 million. The remaining notes have to be exchanged for the deal to be completed, which it seems it probably will.
This comes just a couple of weeks after the brand announced more plans to lower its debt. The plans include new pricing and marketing as well as job cuts and store closings. The company also reported a 6.1% decline in revenue to $532 million with sales declining by 9%. Sales would have declined even more if it wasn’t for Madewell where sales increased by 17%. Sales declined by 11% at J Crew.
Earlier this month, Millard Drexler announced that he’d resign as CEO of the brand after 14 years. The brand also announced that James Brett is the brand’s new CEO, replacing Drexler. Brett will be replacing Drexler next month and join the J Crew’s board of directors. Drexler will, however, stay with the company as Chairman of the brand’s board of my directors.
A couple of months before that, Jenna Lyons resigned as creative director of the brand. Lyons resigned after having been with the brand for 26 years. Lyons had been replaced by Somsack Sikhounmuong, who was previously women’s Head of Design.
This is just the latest in the brand’s plans to increase sales and profits. A couple of months ago, J Crew announced that it would be cutting 250 jobs. In December, the brand was said to be in talks with creditors to lower its approximately $2 billion debt. Then the brand reported declining sales for the fourth fiscal quarter 2016 and announced that it would be closing up to 20 stores.
J Crew has not responded to requests for comment.
So, what do you think? Will sales and profits increase at J Crew? Let me know in the comments below. Also, don’t forget to subscribe to get new posts sent directly to your inbox and follow me on Facebook, Instagram, and Snapchat.
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