J.Crew Proposes Debt Conversion For Self Rescue Time

According to the world clothing shoes and hats net,

Group Inc. proposed a debt swap and settlement of its recent lawsuit on Monday, trying to win more than two years in July to replace Millard "Mickey" Drexler as the new CEO James Brett in order to reverse the sales decline and sustained losses of the group in the past 11 quarters.

J.Crew Group Inc. is seeking to convert a $566 million 600 thousand cash payment bill due in May 2019 to equity and 2021 maturity bonds, which will dilute 2011's privatization of TPG Capital LP and Leonard Green Partners LP by $3 billion.

The scheme needs to get at least 95% holders of the maturity bonds in 2019 to push through. The group reveals that it has obtained the consent of the two largest creditors, and they still need to win 28% holders' support.

At the same time, the group expressed its willingness to provide compensation to regular loan lenders in exchange for their J.Crew.

Litigation withdrawing intellectual property rights.

J.Crew brand intellectual property rights have been pferred to the Cayman Islands offshore subsidiary by J.Crew Group Inc. in December 2016 for $250 million, which was opposed by creditors, and the two sides are in court for this purpose.

The new bonds will be issued by offshore subsidiaries holding J.Crew brand intellectual property and J.Crew brand intellectual property as collateral.

Moody s Corp. analyst Moodie Raya believes that the above pactions help J.Crew Group Inc. to reduce leverage, but the group's cash will be weakened by the cost of IP authorization.

J.Crew Group Inc. president, chief operating officer and chief financial officer Michael Nicholson said that the plan was the result of intense deliberations and consultations in the past months, not only in the current challenging market environment, but also in clearing the way for the implementation of the business plan, which is crucial to the long-term success of the group.

As of April 29th, J.Crew Group Inc. has a net cash of 104 million 600 thousand US dollars, an increase of 91.2% over the same period last year of 54 million 700 thousand US dollars, with a total debt of 1 billion 503 million US dollars, which is 56 times the adjusted EBITDA 26 million 600 thousand US dollars in the first quarter.

Involvement in the weak J.Crew brand J.Crew Group Inc. same store sales have declined for the 11 consecutive quarter.

J.Crew Group Inc. recorded a 9% decline in the first quarter on the basis of a 7% decline in same store sales in the same period last year, extending the decline since the three quarter of fiscal 2015.

The two major brands of J.Crew and Madewell continue to take their own course, accounting for a sharp decrease of 12% in the same store sales and 80% in the group with a total income of over 12%, while the continued strong Madewell has achieved an increase of 10%.

Group revenues totaled $532 million, down 6.3% from the same period last year, J.Crew fell 10.9% to $428 million 500 thousand, and Madewell increased 16.9% to 84 million 680 thousand US dollars.

The net loss expanded from $8 million 41 thousand in the same period last year to $123 million 300 thousand, including the impairment loss of goodwill in the J.Crew brand 129 million 800 thousand dollars and the severance payment in April, which announced the reduction of 10 million 700 thousand jobs in 250 jobs.

Stocks at the end of the year decreased by 17% to $325 million, and gross margins fell 70 basis points to 35.4%.

Mickey Drexler said he was "disappointed" in the first quarter earnings yesterday, but pointed out that he was optimistic about improving his business.

These include the above mentioned layoffs, and the restructuring of the C prefix management team, which is also Michael Nicholson, the group's chief executive officer, COO and CFO's three key positions. She also manages the difficult J.Crew brand, the J.Crew brand President Libby Wadle is pferred to the Madewell brand president.

In recent years, the high-end Collection series deviating from customer demand, the normalization of discounts and the disproportionate product quality with the price have accelerated the loss of core customers of J.Crew brand.

J.Crew Group Inc. has decided to cut down the price of the 300 products, re create the image of people closer to people and invest in digital marketing.

Last week, J.Crew Group Inc. announced that the 72 year old Mickey Drexler will only serve as chairman of the board of directors from next month to end the 14 year long group CEO career. The former president and creative director of Jenna group Lyons, who is regarded as group two, has announced that she will quit before the end of the year after 26 years of service. This has also confirmed the announcement of the end of the J.Crew Group Inc. era.

Taking the hot potato of J.Crew Group Inc. is currently James Brett, President of West Elm Inc. of New York furniture brand Williams-Sonoma Inc. (NYSE:WSM).

He previously had the same name brand and Anthropologie brand, J.C. Penney Co, Inc. (NYSE:JCP) Penny department store and Macy "Urban" (Messi) in the name of Urban Outfitters Inc. (NASDAQ:URBN).

The group's predecessor is May Department Stores Company and other large retail groups.

In a recent article, Sears Canada former chairman and CEO Mark Cohen, Professor of business at Columbia University, points out that it takes 2-5 years to successfully reform a retail companies.

Now that J.Crew Group Inc. is close to winning the time required, it will take a look at the new CEO James Brett.

As of June 12th, the group had 278 J.Crew retail outlets, 117 Madewell stores and 178 factory shops, including 39 J.Crew Mercantile stores.

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