Bradley Partner Bill Norton Quoted in PacerMonitor on J.Crew’s Turnaround to Avoid Bankruptcy
Bradley attorney Bill Norton was quoted in PacerMonitor on J.Crew’s attempt to avoid bankruptcy. After recording an inventory charge of $39.3 million during the fourth quarter of 2018, the retailer is exploring options to restructure its $1.7 billion debt.
“J.Crew cannot solve their operational problems solely by creating liquidity,” Norton explained. “They’ve got to focus on generating more market share and reversing the trend of customers shopping elsewhere.”
“It could have been a panic move by the board to terminate Jim Brett, but sometimes you need greater patience and hope that a new CEO’s decisions will develop greater sales in the long run,” Norton said. “The problem is retailers are short on time to develop a new strategy, and if it doesn’t bear fruit, they may not have sufficient liquidity to regroup and try again.”
“J.Crew storefront locations are not an asset,” Norton said. “They’re a liability. They lease the stores and if the store is not profitable, their only ability to get out of these leases other than through bankruptcy is either find a tenant to sublease it from them and/or reach an agreement with the landlord, which is often hard to do.”
The complete article, “J. Crew Working on Turnaround to Avoid Bankruptcy ‘Death Knell,’” first appeared in PacerMonitor on April 23, 2019.