J.Jill obtains extension on forbearance deal
The Quincy, Massachusetts-based womenswear retailer announced on Thursday that it has secured a one-week extension on forbearance agreements with its lenders, giving the company more time to get its finances in order.
J.Jill entered into two forbearance agreements with its lenders under its asset-backed loan and term loan credit facilities on June 15. With the amendments made to these deals on Thursday, the company’s lenders have agreed not to exercise any rights and remedies until July 23.
A statement previously made by J.Jill in its annual report that “substantial doubt exists as to our ability to continue as a going concern” breached the affirmative covenants in the company’s ABL and term loan, raising concerns about its lenders’ reaction.
“We remain engaged in productive discussions with our lenders, and today, our lenders extended the forbearance period under the existing forbearance agreements, which provides additional time for us to complete negotiations,” said J.Jill’s interim CEO, Jim Scully, in a release. “We are making progress with the negotiations and expect a resolution soon.”
Like many retailers, J.Jill has been deeply impacted by the negative effects of the Covid-19 pandemic, which has contributed to the company’s difficulties in dealing with its debts.
At the close of the fiscal year ended February 1, 2020, the company had $274 million in long-term debt obligations, as well as $307 million in operating lease obligations and $113 million in purchase obligations.
The retailer’s annual sales totaled $691.3 million, while its net loss came to $128.6 million, or $2.94 per diluted share.
J.Jill expects to file its first-quarter financial results on July 31.
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