A window display at a J.Crew store overlooks Rockefeller Center in New York City (Photo by AP/Mark Lennihan)
Many businesses have laid off employees and even filed for bankruptcy under the economic downturn. Favored by former US First Lady Michelle Obama, the fashion firm J.Crew has filed for bankruptcy protection, making it the first big US retailer that becomes a victim of the coronavirus pandemic.
Under the terms of the filing, its main creditors are set to take control of the group in exchange for canceling debts of $1.65bn. They are also providing about $400m of fresh financing to keep J.Crew’s operations afloat. Its 500 stores have been closed by the pandemic and some will not reopen. However, the firm has not yet disclosed how many outlets will disappear.
J.Crew got its start as a catalog-only retailer in 1983, before opening its first store in New York City in 1989. It has grown rapidly since 2011, nearly doubling the number of stores. But it has also accumulated far more debt. It had $1.7 billion as of Feb 1.
Control of the group will now pass into the hands of Anchorage Capital Group, GSO Capital Partners and Davidson Kempner Capital Management. As well as J Crew, the group also owns denim clothing specialist Madewell, which it had planned to spin off as a separate entity before the outbreak of the virus.
J.Crew chief executive Jan Singer described the move as a “comprehensive financial restructuring” aimed at allowing the business “to thrive for years to come.”
Another victim is Airbnb which is laying off about 25% of its workforce as coronavirus upends the travel industry and threatens the company’s core business.
(Photo by Reuters)
On Tuesday, the short-term rental startup said nearly 1,900 employees will be fired worldwide, out of 7,500.
“We are collectively living through the most harrowing crisis of our lifetime, and as it began to unfold, global travel came to a standstill,” Airbnb CEO and co-founder Brian Chesky said in a letter to employees. According to Chesky, Airbnb’s business has been “hit hard” and revenue this year is expected to be less than half of what the company earned in 2019.
In the US, Airbnb said it will cover 12 months of health insurance for its employees through COBRA. In all other countries, it will cover health insurance costs through the end of this year.
The company has recently introduced virtual versions of its Airbnb Experiences, which feature hosts from more than 30 countries leading activities and range in price from $1 to $40. Experiences include online bike tours, meditating with a Japanese monk, or taking a Moroccan cooking class.