J. Jill has another week to sort itself out.
The 280-door retailer extended its forbearance agreements with lenders on Thursday, giving the two sides until July 23 to wrap up talks.
“We remain engaged in productive discussions with our lenders, and today, our lenders extended the forbearance period under the existing forbearance agreements, which provides additional time for us to complete negotiations,” said Jim Scully, interim chief executive officer of J. Jill. “We are making progress with the negotiations and expect a resolution soon.”
On June 15, the retailer signed the forbearance agreements with the lenders behind its asset-backed loan and its term loan credit facilities, with the lenders agreeing not to immediately exercise their rights and remedies tied to the company’s “going concern” statement and other loan covenants.
J. Jill acknowledged in its annual report that “substantial doubt exists as to our ability to continue as a going concern.”
That statement, which the company was compelled to make, violated the affirmative covenants in the ABL facility and term loan.
At the end of its fiscal year on Feb. 1, J. Jill had $274 million in long-term debt obligations, $307 million in operating lease obligations and $113 million in purchase obligations.
Last year, J. Jill saw sales of $691 million.
Many other companies have found themselves suddenly overwhelmed by their debts during the coronavirus shutdown. Among the retailers ultimately succumbing to bankruptcy were Neiman Marcus, J. Crew, J.C. Penney, Brooks Brothers and Lucky Brand.