Like many companies right now, J.Crew is facing a difficult financial situation.
The beloved New York-based label — which has become a wardrobe staple for celebrities including Michelle Obama, Kate Middleton and Meghan Markle — is preparing to file for bankruptcy as early as this weekend, CNBC reports, citing “people familiar with the matter.”
Though the source says plans are not finalized, the privately held company is currently “working to secure $400 million in financing to fund operations in bankruptcy,” according to CNBC.
The news comes after reports that the retailer (which operates the denim-driven label Madewell, in addition to its namesake brand) has been struggling with a heavy debt load for years. According to CNBC, the economic downfall caused by the novel coronavirus (COVID-19) “exacerbated” the problem.
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Unlike the younger and trendier Madewell, J.Crew has also faced a decline in sales, with many criticizing the label for maintaining a high price point and an idealized aesthetic that feels out of touch, prompting loyal customers to walk away.
In recent years, J.Crew has lost both retail executive Mickey Drexler and longtime creative director, Jenna Lyons.
Lyons became somewhat of a fashion icon during her 26 years at J.Crew, thanks to her signature thick-rimmed glasses and affinity for colorful prints. She is also largely responsible for revamping the brand using neon, sequins and statement accessories— and shaping the way American men and women dressed in the 2010s.
