Hede funds Anchorage and Blackstone's GSO are buying more of J. Crew's debt, hoping for a profitable trade that could also give the U.S. fashion retailer more time to stave off bankruptcy. Roselle Chen reports.
With $2.1 billion in debt, J. Crew is on the verge of bankruptcy. But the rescue might be on its way. Sources told Reuters, two hedge funds, Anchorage and Blackstone's GSO, are now buying more of J.Crew's debt. They hope to make profit on a bond swap that the company wants to use to get out of the hole. But they also could give the retailer time to work things out. All parties involved declined to comment. Reuters reporter, Jessica DiNapoli, who got the scoop, says the bet is vetted toward the company surviving, but it doesn't necessary mean it will survive. (SOUNDBITE) JESSICA DINAPOLI, REPORTER, REUTERS (ENGLISH) SAYING: "J.Crew departed from signature style of ballet flats and cashmere cardigans, and tailored pieces that appealed to women and men, basically, across the country. They went into more trendy, fun pieces that didn't appeal to as many people. Plus, they also struggled with the raise e-commerce giants, like Amazon." In its latest belt-tightening effort, J. Crew said last week it would eliminate 150 full-time jobs and not fill 100 open positions. Retail sector has been swept with a wave of bankruptcies. Most recently, it toppled companies such as Aeropostale, American Apparel, Payless Shoes, and BCBG.