(Reuters) - J. Crew Group Inc said on Thursday it is exploring an initial public offering for its Madewell brand, as part of several options the U.S. clothing chain is considering to turn around its business.
The company said if it opts for an IPO plan, it could be completed as early as the second half of 2019. The retailer also named Chief Operating Officer Michael Nicholson as its interim chief executive officer.
J. Crew’s CEO Jim Brett, who completed roughly two years, stepped down in October and a committee of four senior executives took over during the interim period.
The preppy fashion retailer has been struggling with falling sales and a dwindling cash flow, as it faces competition from Amazon.com Inc and other online firms that have been eating into traditional retailers’ market share.
The bright spot for J. Crew has been its Madewell brand, with its laid-back and artsy clothes, has won over shoppers. The company said the brand had “another record year in 2018.”
J. Crew had tapped restructuring lawyers for the second time in many years to explore options for restructuring its debt, Reuters reported late last month, citing people familiar with the matter.
“We believe a potential IPO of Madewell could unlock significant value and generate meaningful proceeds that would strengthen our balance sheet and increase our overall financial flexibility to address our 2021 debt maturities,” Nicholson said.
Reporting by Aishwarya Venugopal in Bengaluru; Editing by James Emmanuel