J. Crew, the mass-market clothing company whose preppy-with-a-twist products were worn by Michelle Obama and appeared at New York Fashion Week, filed for bankruptcy protection on Monday. It is the first major retailer to fall during the coronavirus pandemic, though other big industry names including Neiman Marcus and J.C. Penney are also struggling with the toll of mass shutdowns.

J. Crew announced that its parent company, Chinos Holdings, had filed for Chapter 11 protection in federal bankruptcy court for the Eastern District of Virginia. As part of its financial reorganisation plan, it will hand over control to top creditors, including the hedge fund Anchorage Capital, by converting $1.65 billion of its debt into equity. The company also plans to hold onto its Madewell brand, which it had considered spinning off into a public company.

J. Crew added that its e-commerce operation would continue to operate normally throughout its bankruptcy case, and that it planned to reopen its J. Crew and Madewell stores once lockdowns are lifted.

“This agreement with our lenders represents a critical milestone in the ongoing process to transform our business,” Jan Singer, J. Crew’s chief executive, said in a statement.

The company had been in negotiations with lenders on how to handle its debts for weeks and made the decision after its board conferred Sunday evening, according to two people with knowledge of the situation, who spoke on the condition of anonymity because discussions were confidential.

The pandemic has been disastrous for the already weakened retail industry. In March, sales of clothing and accessories fell by more than half.