QUINCY, Mass.--(BUSINESS WIRE)--J.Jill, Inc. (NYSE:JILL), today announced the following updates with respect to its business operations:
Business Update
As previously announced, in response to the COVID-19 pandemic J. Jill, Inc. (the “Company”) took quick and decisive actions during the first quarter to protect the health and safety of its employees and customers as well as to preserve financial liquidity. These actions included:
- Temporarily closing all of its stores beginning on March 18, 2020;
- Leveraging our strong direct-to-consumer model;
- Proactively drawing down $33 million under its revolving credit facility on March 16, 2020;
- Furloughing store employees beginning April 1, 2020 in response to the temporary store closures;
- Reducing the base salaries for the Company’s executive officers and all exempt employees effective April 12, 2020; and
- Forgoing Board of Directors’ Board fees.
“I am proud of our team’s flexibility in adapting to the changing environment amidst the COVID-19 pandemic,” Jim Scully, J.Jill Interim CEO, commented. “With our historically strong direct penetration of approximately 45%, we were able to continue to serve our customer and were pleased with the response we have seen to our new design team’s assortment. We have recently re-opened approximately 85% of our stores with enhanced health and safety protocols, and our initial results have exceeded our expectations driven by our dedicated and loyal customer base and committed associates.”
As a result of the tight cost controls and the proactive measures taken, the Company ended May 2020 with a cash balance of approximately $60 million.
Mark Webb, J.Jill Executive Vice President and Chief Financial Officer, said, “The Company has strong liquidity to meet its financial obligations reflected by our cash balances at the end of May and appreciates the partnership of its vendors and suppliers.”
The Company plans to file its fiscal first quarter 10-Q on July 16, 2020 in compliance with the Securities and Exchange Commission’s (“SEC”) extended filing terms for companies impacted by COVID-19 and the Company’s obligations under its credit facilities.
Forbearance Agreement
On June 15, 2020, the Company filed its Fiscal 2019 10-K with the SEC. The Company’s audited, consolidated financial statements for the year ended February 1, 2020 contained a going concern qualification in the report of our independent registered public accountant. Given this qualification, the Company has fallen out of compliance with certain covenants set forth in its ABL and term loan credit facilities.
On June 15, 2020, the Company entered into two Forbearance Agreements (the "Forbearance Agreements") with the lenders under its ABL and term loan credit facilities with respect to the aforementioned noncompliance. The Forbearance Agreements are described in a Current Report on Form 8-K filed by the Company with the SEC today, and available on the SEC’s Edgar website as well as the Company’s website, which includes the full text of the agreement as an exhibit. Under the Forbearance Agreements, the respective lenders have agreed not to exercise any rights and remedies until July 16, 2020 so long as, among other things, the Company otherwise remains in compliance with its credit facilities and complies with the terms of the Forbearance Agreements.
Mr. Scully concluded, “These Forbearance Agreements will allow us to continue to work with our lenders on a course of action that will resolve the Company’s noncompliance and position the Company to realize its long term plans. We appreciate the patience and support of our associates, vendors and suppliers.”
About J.Jill, Inc.
J.Jill is a premier omnichannel retailer and nationally recognized women’s apparel brand committed to delighting customers with great wear-now product. The brand represents an easy, thoughtful and inspired style that reflects the confidence of remarkable women who live life with joy, passion and purpose. J.Jill offers a guiding customer experience through more than 280 stores nationwide and a robust e-commerce platform. J.Jill is headquartered outside Boston. For more information, please visit www.jjill.com or http://investors.jjill.com.
