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Why J. Crew Is Unraveling

  • The holiday shopping seasons isn't going to offer a boost
  • Drexler has a back-to-basics comeback plan in the works
Denim jackets sit on hangers inside a J. Crew Group Inc. fashion clothing store ahead of its official opening, in Paris, France, on Wednesday, March 4, 2015. J. Crew is increasingly looking overseas for growth, opening stores in London, Hong Kong, Canada and Paris and also expanding its offshoot Madewell brand.
Photographer: Marlene Awaad/Bloomberg
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In the 21 months since speculation swirled that J. Crew Group Inc. was thinking about going public, not much has gone right.

Sales have slumped, a comeback plan hasn’t taken off and now comes a ho-hum Christmas shopping season that analysts say is unlikely to give the once high-flying clothing retailer a boost. Investors are growing increasingly concerned. Prices on J. Crew’s benchmark bonds have sunk to about 25 cents on the dollar, a level that indicates holders are bracing for a debt restructuring.