J. Jill Inc. managed to tiptoe past bankruptcy court.
The retailer said late Friday that its plan to restructure its debt out of court received the thumbs-up from lenders holding 97.8 percent of its term loan facility, enough for the company to move forward without the help of a judge.
Earlier this month, the 280-door retailer laid out a plan to push the due date of certain debts back two years to May 2024, giving the company time to strengthen its balance sheet and position for growth. As part of the restructuring, which is expected to close around Sept. 30 and had been the subject of extended negotiations, the company will receive a junior term loan facility of no less than $15 million.
“The transaction provides J. Jill with the financial flexibility to continue to meet its obligations to its vendors in full and continue to execute on its business plan,” the company said.
If lenders did not agree to the restructuring, the company planned to file a prepackaged Chapter 11 bankruptcy petition.
“J. Jill has been buoyed by a strong direct business and a loyal customer base, and the transaction proposed in this agreement will enable our company to emerge from this challenging stretch in a position of strength,” said Jim Scully, interim chief executive officer, when the plan was first laid out.
That pitch to lenders apparently worked.
With the out-of-court restructuring, the company just barely avoided being a part of the wave of bankruptcies that has swept through fashion and reordered much of the industry in the wake of the coronavirus pandemic.
J. Crew, Neiman Marcus, J.C. Penney, Brooks Brothers and many more succumbed to their debts after stores shut down.
The companies are starting to move forward now — J. Crew is out of bankruptcy, Neiman Marcus is getting there, Brooks Brothers was acquired by Authentic Brands Group and J.C. Penney is set to be sold to landlords — but there are still plenty of companies on edge and hoping the holiday season will somehow break their way.