J. Crew is filing for Chapter 11 bankruptcy as it struggled to keep business afloat during the coronvirus pandemic. It is the first major fashion company to file for bankruptcy as a result of the current climate.

According to MarketWatch’s reports, Chapter 11 bankruptcy enables J.Crew to restructure its debts and will see the company convert approximately $1.6 billion USD of the company’s debt into equity.

After getting acquired by TPG Capital and Leonard Green & Partners in 2010, the company has struggled to make business. Now, the brand will rely on lenders including Anchorage Capital Group, L.L.C., GSO Capital Partners, Davidson Kempner Capital Management LP and others for assistance during the ongoing pandemic.

Kevin Ulrich, Chief Executive Officer of Anchorage Capital Group said, “The significant deleveraging contemplated by this agreement, coupled with J.Crew Group’s strategy to strengthen its robust e-commerce platform to drive continued growth in its direct-to-consumer segment, will position the company for future success.”