Deals
J. Crew Lenders' Battle for Madewell Could Pay Off in Spinoff
- Retailer is required to get creditor consent for IPO or sale
- Madewell sale may help parent pay down loan and fund recovery
A Madewell store in Brooklyn on April 12.
Photographer: Gabby Jones/BloombergThis article is for subscribers only.
A proposed spinoff of Madewell could turn J. Crew Group Inc. into an example of what can go right for creditors of struggling retailers, instead of an epithet for everything that could go wrong.
Lenders fought hard to retain their claim on fast-growing Madewell in 2017 when J. Crew, strapped for cash and trying to stay solvent, shuffled intellectual property beyond their reach. Now their resolve could pay off: J. Crew is mulling an initial public offering of Madewell, and it has to get permission first from those lenders. They could insist that proceeds be used to pay down their $1.4 billion term loan.