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J. Crew will sell its fast-growing denim brand Madewell, according to a document filed Friday by the SEC.
The company announced that Chinos Holdings, its subsidiary, would be renamed Madewell before its IPO. The company did not reveal the size of the offer nor its target price range.
The denim brand said it plans to use the funds raised during its IPO "to pay off its debts and for general business purposes."
Madewell reported $ 614 million in 2018, according to the report. The company said that 87% of its sales are made directly to consumers.
Madewell is the jewel of the parent company J. Crew, which has always struggled to cope with declining sales. For the second quarter, J. Crew recorded a net loss of $ 44.2 million compared to a loss of $ 6.2 million a year ago. Its brand reported that sales had dropped nearly 7% to $ 399.1 million. However, Madewell reported that its sales increased by almost 15% to $ 139.7 million over the same period, or about 24% of the parent's revenues for the quarter.
Madewell, known for its popular denim lines and chic universal basics, has a smaller brick and mortar footprint than J. Crew. The brand said it had 132 stores as of August 3, compared to J. Crew's 365 stores. Madewell said its online sales accounted for 40% of its direct consumer revenues in the first half of fiscal 2019.
J. Crew seems to have considered many solutions to redress the bar of his company in difficulty, including the split of Madewell. Earlier this year, Reuters announced that J. Crew hired restructuring lawyers to explore options to rework his $ 1.7 billion debt.
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