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Bloomberg
Even in a world of retail upheaval, J Jill Inc has had a more dramatic ride than most — and that was before the pandemic.
Just three years after a highly anticipated initial public offering, J Jill’s stock is flirting with zero and the company is trying to fend off bankruptcy. The women’s clothing chain warned its survival was in doubt a month ago after violating terms of its loans, and said Thursday its lenders extended a promise to hold off on taking action until next week.
J Jill’s story illustrates how quickly the fortunes of a retailer can turn in the face of changing consumer habits, and now the onslaught of the coronavirus. Even before Covid-19 shut down most US apparel stores, J Jill was coping with net losses and defections by customers who spent more money at newer online merchants and less on clothing.
Creditors are owed about $270 million, and J Jill’s new forbearance agreement with lenders gives the chain through July 23 to work out a solution. The company, which employed about 1,400 full-time and 2,300 part-time workers as of February, also said it would file its delayed quarterly report on July 31. The stock, which rallied after the disclosure, dropped as much as 19%, the most in more than a month, and the second-worst showing in the S&P Total Market Index.
A representative for J Jill didn’t respond to a request for comment. The company said in a news release that it’s still in “productive discussions with our lenders,†and that the new forbearance will give it time to complete negotiations.
This isn’t what investors and analysts envisioned after the company raised about $163 million through an initial public offering, which was backed by Bank of America Corp.’s Merrill Lynch, Morgan Stanley and Jefferies Group LLC. Shortly after its debut in March 2017, J Jill garnered eight buy ratings and two holds from analysts intrigued by strong e-commerce sales and about 300 stores that specialised in fashion aimed at women 45 and over.
Within six months, the company missed forecasts in two consecutive quarters, and its shares plunged by almost half amid analyst downgrades.