Dive Brief:

• Women's apparel seller J. Jill named Claire Spofford as its new CEO, effective "no later than" Feb. 15, according to a press release.
• Spofford was once chief marketing officer for J. Jill. Most recently, she served as president of catalog and online retailer Cornerstone Brands, where she oversaw the Ballard Designs, Frontgate, Garnet Hill and Grandin Road banners. She has also had executive roles at Orchard Brands and Timberland. 
• She replaces Linda Heasley, who stepped down last December. Board member Jim Scully has been serving as interim CEO.

Dive Insight:

As she takes over at J. Jill, Spofford will have a turnaround project to manage. The retailer has dodged a bankruptcy this year and still faces financial risks with debt on its balance sheet and sales far down year over year amid the pandemic.

In September, the company cut a debt exchange deal with lenders after acknowledging that Chapter 11 was on the table and that the company's survival was uncertain. The deal followed months of uncertainty amid an extended forbearance agreement with lenders, all of it put into motion by the financial turmoil created by the COVID-19 closures.

In a press release this week, ratings firm S&P Global Ratings gave the apparel retailer a CCC+ rating following its exchange. The rating signals "the ongoing risk of a conventional default" at Jill following the deal. Analysts with S&P did note that the debt exchange and cash infusion (in the form of a new loan) that came with the deal reduced J. Jill's default risk, but they also said that its capital structure could still be unsustainable.

"[P]rior to the pandemic, Jill was already beleaguered by merchandising and operational missteps that led to deteriorating performance and our view that its once-loyal customers had strayed towards other brands," S&P analysts said. "We anticipate continued operational challenges as the company contends with the continuing pandemic, while accelerating competitive pressures and changing consumer preferences hinder sales from returning to fiscal 2019 levels."

Spofford brings with her familiarity of the company and J. Jill's audience. At Cornerstone Brands, she worked on "evolving the brands into profitable, digitally driven omnichannel businesses," according to a J. Jill press release. Omnichannel chops will likely be key to J. Jill's turnaround, as the apparel space keeps evolving and reacting to the COVID-19 pandemic.