J.Jill Inc. has completed its financial restructuring.
The womenswear chain announced today that its out-of-court transaction with lenders closed on Wednesday. As part of the agreement, the Quincy, Mass.-based company now has at least $15 million in new capital, while the maturity of its term loan debt has been extended to May 2024.
According to J.Jill, the arrangement allows it to continue to meet its obligations to its vendors in full as well as maintain business operations amid the coronavirus pandemic.
“While we were working closely with our lenders to complete our financial restructuring, we were also examining our operating model to identify efficiencies by rationalizing the number of floorsets, catalogs and style count, allowing us to focus on our inventory management and ultimately enhance overall profitability going forward,” CEO Jim Scully said in a statement. “By shifting certain roles and responsibilities and eliminating open positions, we were able to minimize furloughs and headcount reductions as we managed through these challenging times.”
Additionally, the company’s board of directors — in consultation with outside legal and financial advisors — plans to institute a reverse stock split as J.Jill seeks to regain compliance with the minimum price requirement of $1 per share for continued listing on the New York Stock Exchange. The move, which is intended to boost the retailer’s stock price, would involve cancelling J.Jill’s current outstanding stock and distributing new shares to shareholders in proportion to the number of shares they owned prior to the split.
Over the past several months, J.Jill had been teetering on the brink of insolvency as its forbearance period has been extended multiple times by lenders. To reduce expenses, it previously drew down $33 million under its revolving credit facility, as well as furloughed store associates, cut back on the base salaries of its executive officers and had foregone its board of directors’ fees. It also revealed plans to permanently close 11 locations this year for a total of 275 remaining stores by the end of fiscal 2020.
“Despite the ongoing challenges of the pandemic,” added Scully, “we believe that J.Jill has the financial flexibility, with an enhanced operating model, a strong direct business, loyal customers and a dedicated team to drive sustainable results for our shareholders.”