J. Crew Group has become the first retailer to file for Chapter 11 bankruptcy protection during the coronavirus pandemic, with more companies expected to follow in the coming weeks.

J. Crew closed all of its stores temporarily in March as COVID-19 forced retail closures due to stay-at-home orders that prompted nonessential businesses to close. With all of its stores closed, saw its sales drop as it was saddled with a heavy debt load.

On Monday, the men’s and women’s apparel retailer announced that it had reached an agreement with lenders to restructure its debt and deleverage its balance sheet. The company, which also operates Madewell, will convert about $1.65 billion in debt to equity.

J. Crew came to an agreement with its lenders to hold 71% of its Term Loan and 78% of its IPCo Notes, which it said will position its brands for “long-term success.” Debtor-in-possession (DIP) financing of $400 million has also been secured by J. Crew with exit financing committed by the company’s existing lenders, Anchorage Capital Group, GSO Capital Partners, and Davidson Kempner Capital Management, among others.

With the DIP financing and projected cash flows, J. Crew said it expects to support continued operation during the restructuring process. Madewell will continue to remain a part of the J.Crew Group, with Libby Wadle continuing to lead the company as CEO.

"This agreement with our lenders represents a critical milestone in the ongoing process to transform our business with the goal of driving long-term, sustainable growth for J.Crew and further enhancing Madewell's growth momentum," Jan Singer, CEO at J.Crew Group, said in a statement.

"Throughout this process, we will continue to provide our customers with the exceptional merchandise and service they expect from us, and we will continue all day-to-day operations, albeit under these extraordinary COVID-19-related circumstances. As we look to reopen our stores as quickly and safely as possible, this comprehensive financial restructuring should enable our business and brands to thrive for years to come."

J. Crew was acquired by TPG Capital and Leonard Green & Partners in 2011 for $ 3 billion. The company has about $2.5 billion in annual sales for fiscal 2019, with approximately $93 million in liquidity. The company has 182 J. Crew stores and 140 Madewell locations. J. Crew considered spinning Madewell off to help pay down its debt, but reportedly faced resistance from creditors, CNBC said.

For its Chapter 11 filing, J. Crew has hired Weil, Gotshal & Manges LLP as its legal counsel, with Lazard serving as the company’s investment banker. AlixPartners, LLP is the retailer’s restructuring advisor.

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J. Crew could file for bankruptcy as soon as this weekend. A J. Crew sign hangs in front of their store at the Woodbury Common Premium Outlets shopping mall on November 17, 2019 in Central Valley, New York. Getty Images/Gary Hershorn