J. Crew is on the move, planning to open a flagship store this November in London’s Regents Street, and two additional boutiques in that city. One boutique will offer menswear, the other women’s wear.
As J. Crew expands, Chinos, its parent firm is planning to issue $500 million in senior payment-in-kind toggle notes.
Holders of senior debt have priority claim on a company’s assets in the event of a liquidation. Payment-in-kind (PIK) notes may pay interest in the form of bonds or equities, or defer payment in return for issuing a higher interest coupon in the future.
An issuer of a PIK toggle note must pay all deferred interest payments by the note’s maturity date.
Cash raised from the issuing of debt will be used by Chinos to fund dividends to some shareholders. A private entity will sell the notes, which come due in 2019.
Currently, J. Crew operates 249 retail outlets in North America, posting about £1.2 billion in sales annually.
The new stores planned for London will reportedly charge prices for apparel as high as 40 percent more than the US sale price for the same item.
Still, the openings have been eagerly awaited, according to industry observers, and sales are expected to be healthy as the UK economy recovers.
The J. Crew clothing line attracts mainly young adult consumers, and offers an eclectic selection of outerwear, chinos, and casual wear for men and women, boys and girls, and a line for babies, bridal wear, footwear, jewelry, handbags and other accessories.
The firm was founded in 1983 and its premier product offerings were sold through catalogs.