Distressed Retailers Scour Loan Fine Print for Debt Tactics

Heavily indebted retailers J. Crew Group Inc. and Claire’s Stores Inc. are delving into their loan agreements to find creative ways to raise or reconfigure their debt. And creditors, who often have the most to lose, may not be able to stop them.

Take the case of preppy clothing maker J. Crew. The New York-based company is said to be seeking to take advantage of a clause in its loan agreement allowing it to shift its brand name, the crown jewel of its intellectual property, to an unrestricted entity in the Cayman Islands. By doing this, it may now be possible for J. Crew to ...