J. Crew has become one of the first major retailers to file for bankruptcy protection amid the coronavirus pandemic.
The company announced on Monday that it has reached a deal with its lenders that will allow it to restructure its debt, converting $1.65 billion of liabilities into equity.
But as part of that agreement, it has had to file for Chapter 11 bankruptcy relief.
It becomes the first of likely many retailers to face bankruptcy as a result of the COVID-19-related downturn, which has seen retail restricted, malls across the country shut down, and Americans limiting their shopping trips due to social distancing.
J. Crew has three locations in Minnesota, regular stores at the Southdale Center in Edina and on Grand Avenue in St. Paul, and a factory at Twin Cities Premium Outlets in Eagan.
The company has said that it will continue its day-to-day operations despite the bankruptcy filing, "albeit under these extraordinary COVID-19-related circumstances," and said it will look to "reopen our stores as quickly and safely as possible."
It also said the restructuring should allow "our business and brands to thrive for years to come."
Fashion retail has been hit particularly hard by the COVID-19 pandemic, with figures from mid-April finding that sales at clothing stores had dropped by more than 50 percent compared to the same period in 2019.
Even big box stores like Target have said that while their grocery and household goods sales have exploded during the pandemic, its clothing department has experienced a significant downturn.