Madewell names 1st CEO
April 04, 2019
J. Crew itself may not have a CEO at the moment, but now its Madewell brand does.
The denim-focused brand has been the star of the show for a few years now, and the apparel company has leaned on its growth as its namesake brand slips. The retailer continues to battle the consequences of its $1.7 billion in debt, even after prevailing in a debt swap scheme last year, and is down to $25.7 million or so in cash, according to a press release.
The financial situation has reportedly prompted the company to seek out another round of debt restructuring after a dramatic debt swap scheme achieved last year. It also threatens efforts to revive its namesake brand and grow its smaller, but better-performing, sibling banner. Madewell under Wadle’s leadership has proved to be a saving grace, with sales in the most recent quarter rising 16% to $157.9 million and comps rising 22% following last year’s 19% fourth-quarter increase. While J. Crew is faltering by comparison — with a sales drop of 4% to $527.9 million and comps growth of only 6% — it remains by far the bigger operation.
For some observers, it’s a backdrop to what could signal a bankruptcy filing or a spin-off of Madewell, or both, though none of that appears to be in the works at the moment.
“Sometimes companies, if they have divisions or brands that are more or less profitable, they might have to consider selling things off to raise cash,” Pat Collins, a partner at Farrell Fritz with expertise in bankruptcy, restructuring and distressed retail, told Retail Dive in an interview last week. “And that might also spiral. You want to sell something that’s going to generate a return, but that impairs” operations further.
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