Troubled women’s specialty chain J.Jill bought itself a little more time, but only for one more week.
On bankruptcy watch for the past few months, the retailer on Thursday said it was able to reach an agreement with its lenders to extend its forbearance period until July 23 as both sides continue talks to resolve J. Jill’s noncompliance of certain financial obligations.
Struggling parent firm J. Jill Acquisition, working with advisors to help with a restructuring of its debt load, was able to secure the initial forbearance agreement with lenders under its asset-based lending and term loan credit facilities. Under that agreement, the lenders promised to hold off on any action related to their rights or remedies until July 16.
J. Jill already said the noncompliance raises “substantial doubt about the company’s ability to continue as a going concern,” according to a regulatory filing last month. Raya Sokolyanska, retail credit analyst at Moody’s Investors Service, said at the time that the women’s chain would likely pursue a bankruptcy filing or debt restructuring.
J.Jill was already on shaky ground before there viral outbreak in mid-March. Temporary store closures choked off its cash flow, forcing the women’s specialty chain to furlough store employees beginning April 1. While the company kept its online operations going, most retailers have found that digital sales aren’t enough to offset brick-and-mortar losses.
“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,” interim CEO Jim Scully said Thursday. “We are making progress with the negotiations and expect a resolution soon.”
The company, which plans to file fiscal first-quarter results on July 31, didn’t disclose its cash holdings. Last month it reported a cash balance of $60 million at the end of May.
At least 85 percent of its store base reopened earlier this month, but it is unclear if a worsening outbreak has forced any locations to close down again.