J.Jill has been granted another extension to its forbearance period.
The struggling womenswear chain and its lenders have amended its existing agreements. Originally set to expire on June 15, the agreement prevents the lenders from exercising any rights and remedies against the company until July 30.
So long as it remains compliant with the terms of those agreements, J.Jill has until the end of the month to explore various financial options as it continues to grapple with cash flow challenges that have accelerated amid the coronavirus pandemic.
“We remain engaged in productive discussions with our lenders,” J.Jill interim CEO Jim Scully said in a statement last week, when the forbearance’s monthlong grace period was granted an extension to July 23. “We are making progress with the negotiations and expect a resolution soon.”
J.Jill entered into two forbearance agreements in mid-July after falling out of compliance with certain covenants under its asset-based lending and term loan credit facilities. At the time, the retailer reiterated in a filing with the Securities and Exchange Commission that it faced “substantial doubt” about its ability to continue as a going concern.
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When government-mandated lockdowns started in mid-March, J.Jill shuttered all of its stores across the country. As of last month, about 85% of its total brick-and-mortar fleet was back in business as state and local authorities gradually eased restrictions on nonessential business. (It expects to continue reopening outposts in a phased approach.)
For the fiscal year ended Feb. 1, the Massachusetts-based retailer logged sales of $691.3 million, compared with the prior year’s $706.2 million. It also recorded a net loss of $128.5 million, or a loss of $2.94 per diluted share, versus the 2019 fiscal year’s profits of $30.5 million, or earnings of 69 cents a share. It ended May with about approximately $60 million at hand.
To reduce expenses, J.Jill has drawn down $33 million under its revolving credit facility, as well as furloughed store associates, reduced the base salaries of its executive officers and foregone its board of directors’ fees.