J.Crew Group Inc. is shelving its proposed Madewell IPO amid an erratic stock market due to investor worries over the coronavirus outbreak.
The specialty retailer said this week that it had entered into an amended agreement with lenders to postpone the proposed offering, which was scheduled to go forward on March 2. Instead, it expects to complete the transaction between March 18 and April 30.
The New York-based firm included the announcement in its fourth-quarter earnings report, which showed a 2% gain in revenues to $747.2 million. Madewell’s sales increased 13% to $178.1 million and comps rose 9%. Further, following several quarters of consecutive losses, J.Crew turned a profit: Its net income in Q4 was $1.5 million, compared with a net loss of $74.4 million for the same period last year.
“As a result of this strong performance, we now have an opportunity to broaden our exploration of strategic alternatives in support of our objectives to maximize value, position the company for long-term growth and de-leverage our balance sheet,” President and COO Michael Nicholson said in a statement, adding that the newly proposed dates would “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.”
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J.Crew is not the only retailer to delay an IPO amid coronavirus jitters: This week, Cole Haan reportedly paused its market launch. The Reuters article reported that the footwear and accessories maker had sought to begin formal meetings with potential investors on March 2, but insiders now suggest that the firm might wait until it sees improvement in the market before going public.
Major benchmark indexes have been attempting a rebound in the past couple days after one of the worst weeks for the stock market since the 2008 financial crisis. At market open on Wednesday, the Dow Jones Industrial Average surged more than 680 points, while the S&P 500 grew 63 points and the Nasdaq Composite advanced 157 points.
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Madewell Nears IPO As J.Crew Continues to Struggle
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