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J.Crew said to be reading its restructuring

By Angela Gonzalez-Rodriguez

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Preppy fashion group J. Crew Group Inc is said to be taking steps to negotiate with its creditors about cutting the value of its approximately 2 billion dollars debt load.

The move comes as the U.S. retailer struggles with falling sales, people familiar with the matter said on Friday, as reported by Reuters.

The same sources pointed out that a debt restructuring would underscore the challenges the company has faced since it was acquired by private equity firms TPG Capital LP and Leonard Green & Partners LP in a 3 billion dollar leveraged buyout in 2011.

The company is exploring ways to take advantage of the low trading price of some of its debt, one of the people said. It’s worth recalling that J. Crew booked 845.9 million dollars in impairment losses in the year-earlier period.

Since then, the company’s executives have put the wheels in motion, managing to reduce net loss to 7.9 million dollars in the quarter ended October, 29, from 759.7 million dollars a year earlier, the New York-based company said in a filing last month.

As part of its preparations for negotiating with its creditors, J. Crew is planning to move the rights to its iconic brand into a separate subsidiary, the people said, published Reuters. This move would give J. Crew a number of options to cut down its debt, including raising new financing to buy back its loans and bonds at a discount, or offering creditors the chance to swap into the new debt holdings.

J. Crew faces 500 million dollars in maturities in bonds in 2019.

J CREW