J. Crew delays proposed Madewell IPO

Dive Brief:

J. Crew on Monday announced that it entered into an amended agreement with lenders to pause on the proposed Madewell IPO that was intended to go forward on March 2, and will now extend the date to complete the transaction from March 18 to April 30.
The company will continue to seek a "strategic alternatives to maximize value," including the possible separation of J. Crew and Madewell into two separate companies, pending market conditions, according to a company press release.
J. Crew reported net income in the fourth quarter was $1.5 million, up from a net loss of $74.4 million in the year-ago quarter.

Dive Insight:

J. Crew is showing signs of overarching improvement, even as the volatility of the current stock market may be sidelining its original plans for Madewell's IPO.

J. Crew's net income came in at $1.5 million in Q4 this year.

Cara Salpini/Retail Dive, data from J. Crew quarterly reports

Financial markets have recently been reacting to the spread of COVID-19, a disease caused by a member of the coronavirus family, including losing $203 billion in value on Friday for a total of a nearly $3.2 trillion for the week.

The new proposed dates of the IPO, "will allow us additional time to thoroughly assess all alternatives, including the separation of J. Crew and Madewell into two independent companies and a potential IPO of Madewell," COO Michael Nicholson said Monday in a statement.

J. Crew Group isn't the only company weighing its proposed IPO date due to a skittish market. Cole Haan also delayed its launch after the S&P 500 Index lost nearly 12% of its value last week, according to Reuters.

The Madewell brand is still proving to spur growth at the company, with sales increasing 13% to $178.1 million in the fourth quarter, and comparable sales rising 9%. J. Crew sales decreased 2% to $516.8 million, while comparable sales increased 1% for Q4.

Total revenues for fiscal 2019 increased 2% to $2.5 billion, with namesake J. Crew brand decreasing 4% to $1.7 billion for the year. Madewell sales increased 14% for the year to $602.4 million. Total debt at the end of the fourth quarter stood at approximately $1.7 billion.