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What changed in J.Jill, Inc.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of J.Jill, Inc.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+263 added−212 removedSource: 10-K (2025-04-01) vs 10-K (2024-04-04)

Top changes in J.Jill, Inc.'s 2025 10-K

263 paragraphs added · 212 removed · 177 edited across 9 sections

Item 1. Business

Business — how the company describes what it does

29 edited+1 added−2 removed59 unchanged
Biggest changeProduct J.Jill’s products are marketed under the J.Jill brand name and sold primarily through two channels: its ecommerce platform and catalog (“Direct”) and its retail stores (“Retail”). J.Jill’s thoughtful, versatile apparel, footwear and accessories reflect the individuality of each customer and are made to seamlessly take them through every moment of their day.
Biggest changeJ.Jill’s thoughtful, versatile apparel, footwear and accessories reflect the individuality of each customer and are made to seamlessly take them through every moment of their day. J.Jill uses high quality fabrics and techniques for season-after-season comfort and style.
The public can obtain any documents that are filed by us at www.sec.gov. 9 In addition, this Annual Report as well as future quarterly reports on Form 10-Q, current reports on Form 8-K and any amendments to all of the foregoing reports, are made available free of charge on our Internet website (https://www.jjill.com) as soon as reasonably practicable after such reports are electronically filed with or furnished to the SEC.
The public can obtain any documents that are filed by us at www.sec.gov. 10 In addition, this Annual Report as well as future quarterly reports on Form 10-Q, current reports on Form 8-K and any amendments to all of the foregoing reports, are made available free of charge on our Internet website (https://www.jjill.com) as soon as reasonably practicable after such reports are electronically filed with or furnished to the SEC.
J.Jill ’s merchandise offering drives consistent sales across seasons with no quarter contributing more than 26% of total annual net sales in Fiscal Year 2023. Competition The women’s apparel industry is highly competitive. J.Jill competes with local, national and international retail chains and department stores, specialty and discount stores, catalogs and internet businesses offering similar categories of merchandise.
J.Jill ’s merchandise offering drives consistent sales across seasons with no quarter contributing more than 26% of total annual net sales in Fiscal Year 2024. Competition The women’s apparel industry is highly competitive. J.Jill competes with local, national and international retail chains and department stores, specialty and discount stores, catalogs and internet businesses offering similar categories of merchandise.
The brand represents an easy, thoughtful and inspired style that celebrates the totality of all women and designs its products with its core brand ethos in mind: keep it simple and make it matter. J.Jill offers a high touch customer experience through over 200 stores nationwide and a robust ecommerce platform. J.Jill is headquartered outside Boston.
The brand represents an easy, thoughtful and inspired style that celebrates the totality of all women and designs its products with its core brand ethos in mind: keep it simple and make it matter. J.Jill offers a high touch customer experience through over 250 stores nationwide and a robust ecommerce platform. J.Jill is headquartered outside Boston.
Through its various business initiatives, J.Jill believes it will continue to attract new customers to its brand, migrate from single channel to more profitable omnichannel customers and increase overall customer spend. 6 Increase Direct Sales. Given its strong foundation and ongoing website enhancements, J.Jill believes it can leverage its Direct platform to broaden its customer reach and drive additional sales.
Through its various business initiatives, J.Jill believes it will continue to attract new customers to its brand, migrate from single channel to more profitable omnichannel customers and increase overall customer spend. 7 Increase Direct Sales. Given its strong foundation and ongoing website enhancements, J.Jill believes it can leverage its Direct platform to broaden its customer reach and drive additional sales.
Fiscal Year 2023 is comprised of 53 weeks and Fiscal Years 2022, and 2021 are comprised of 52 weeks. Company Overview J.Jill is a national lifestyle brand that provides apparel, footwear and accessories designed to help its customers move through a full life with ease.
Fiscal Years 2024 and 2022 are comprised of 52 weeks and Fiscal Year 2023 is comprised of 53 weeks. Company Overview J.Jill is a national lifestyle brand that provides apparel, footwear and accessories designed to help its customers move through a full life with ease.
J.Jill considers its relations with its associates to be very good. J.Jill’s offices were open throughout Fiscal Year 2023 as it continued to embrace a flexible work model across the organization in accordance with its Optimizing Work and Life initiative adopted in Fiscal Year 2022.
J.Jill considers its relations with its associates to be very good. J.Jill’s offices were open throughout Fiscal Year 2024 as it continued to embrace a flexible work model across the organization in accordance with its Optimizing Work and Life initiative adopted in Fiscal Year 2022.
J.Jill’s leadership team has extensive industry experience with significant expertise in merchandising, marketing, stores, ecommerce, human resources, and finance. J.Jill’s senior leadership team has an average of 25 years of experience in retail. Growth Strategy Key drivers of J.Jill’s growth strategy include: Grow Value of Our Customer Base.
J.Jill’s leadership team has extensive industry experience with significant expertise in merchandising, marketing, stores, ecommerce, human resources, and finance. J.Jill’s senior leadership team has an average of 26 years of experience in retail. Growth Strategy Key drivers of J.Jill’s growth strategy include: Grow Value of Our Customer Base.
In Fiscal Year 2023, the distribution center handled 28 million units, split between 12 million retail (43%) and 16 million direct (57%), and J.Jill believes this facility is sufficient to support its future growth.
In Fiscal Year 2024, the distribution center handled 28 million units, split between 12 million retail (43%) and 16 million direct (57%), and J.Jill believes this facility is sufficient to support its future growth.
Following several years of optimizing the fleet through net store closings, J.Jill believes there is an opportunity to strategically add back net 20-25 profitable new stores over the next three to five years. We target new locations primarily in lifestyle centers and premium malls. Strengthen Omnichannel Capabilities.
Following several years of optimizing the fleet through net store closings, J.Jill believes there is an opportunity to strategically add back net 50 profitable new stores over the next three to five years. We target new locations primarily in lifestyle centers and premium malls. Strengthen Omnichannel Capabilities.
J.Jill is undertaking initiatives to further develop its website to provide a more personalized shopping experience with more features and services for its customers. The website also provides enhanced capability to engage customers on mobile devices, and improved access to products. Profitably Expand Our Store Base .
J.Jill is continuing to undertake initiatives to further develop its website to provide a more personalized shopping experience with more features and services for its customers. The website also provides enhanced capability to engage customers on mobile devices, and improved access to products. Profitably Expand Our Store Base .
J.Jill believes that its credit card program encourages customer loyalty, repeat visits and additional spending. In Fiscal Year 2023, 46% of its gross sales were generated by its credit card holders. 7 Sourcing and Supply Strategy To efficiently source its products, J.Jill leverages its longstanding relationships with agents who represent suppliers and factories.
J.Jill believes that its credit card program encourages customer loyalty, repeat visits and additional spending. In Fiscal Year 2024, 46% of its gross sales were generated by its credit card holders. 8 Sourcing and Supply Strategy To efficiently source its products, J.Jill leverages its longstanding relationships with agents who represent suppliers and factories.
Agents work with approximately 40 suppliers on J.Jill ’s behalf. J.Jill sources its merchandise globally from 11 countries with the top three by volume being India, Indonesia, and Vietnam. No single supplier accounts for more than 20% of merchandise purchased by volume.
Agents work with approximately 35 suppliers on J.Jill ’s behalf. J.Jill sources its merchandise globally from 10 countries with the top three by volume being India, Indonesia, and Vietnam. No single supplier accounts for more than 20% of merchandise purchased by volume.
The customer contact center is an extension of the J.Jill brand, providing a consistent customer experience at every stage of a purchase across all of its channels. In Fiscal Year 2023, J.Jill managed approximately 3.4 million customer interactions through its in-house customer contact center in Tilton, New Hampshire.
The customer contact center is an extension of the J.Jill brand, providing a consistent customer experience at every stage of a purchase across all of its channels. In Fiscal Year 2024, J.Jill managed approximately 3.6 million customer interactions through its in-house customer contact center in Tilton, New Hampshire.
Further, its robust customer database and analytical capabilities allow J.Jill to be focused and strategic in identifying high potential locations and optimizing its store footprint. Retail Channel J.Jill Stores As of February 3, 2024, J.Jill operated 244 stores across 42 states with approximately half located in lifestyle centers and the remaining in premium malls; all J.Jill stores are leased.
Further, its robust customer database and analytical capabilities allow J.Jill to be focused and strategic in identifying high potential locations and optimizing its store footprint. Retail Channel J.Jill Stores As of February 1, 2025, J.Jill operated 252 stores across 42 states with approximately half located in lifestyle centers and the remaining in premium malls; all J.Jill stores are leased.
Following several years of optimizing the fleet through net store closings, J.Jill returned to net store growth in Fiscal Year 2023 with the addition of net one new store. J.Jill will continue to review its fleet for optimization opportunities going forward, while also pursuing net new store openings.
Following several years of optimizing the fleet through net store closings, J.Jill returned to net store growth in Fiscal Year 2024 with the addition of net three new stores. J.Jill will continue to review its fleet for optimization opportunities going forward, while also pursuing net new store openings.
Of these associates, 298 were employed in its headquarters in Quincy, Massachusetts, 2,507 were employed in its retail stores and field management team, and 286 worked in its distribution and customer contact center and administrative office in Tilton, New Hampshire. The number of associates, particularly part-time associates, fluctuates depending upon seasonal needs.
Of these associates, 301 were employed in its headquarters in Quincy, Massachusetts, 2,649 were employed in its retail stores and field management team, and 299 worked in its distribution and customer contact center and administrative office in Tilton, New Hampshire. The number of associates, particularly part-time associates, fluctuates depending upon seasonal needs.
The following table shows new store openings and closings since Fiscal Year 2019.
The following table shows new store openings and closings since Fiscal Year 2020.
Total Stores at Stores Stores the End of the Store Open Year Opened Closed Fiscal Year Fiscal Year 2019 11 (6 ) 287 Fiscal Year 2020 — (20 ) 267 Fiscal Year 2021 — (14 ) 253 Fiscal Year 2022 1 (11 ) 243 Fiscal Year 2023 2 (1 ) 244 5 Direct Channel J.Jill’s Direct channel consists of its website and catalog orders.
Total Stores at Stores Stores the End of the Store Open Year Opened Closed Fiscal Year Fiscal Year 2020 — (20 ) 267 Fiscal Year 2021 — (14 ) 253 Fiscal Year 2022 1 (11 ) 243 Fiscal Year 2023 2 (1 ) 244 Fiscal Year 2024 9 (1 ) 252 6 Direct Channel J.Jill’s Direct channel consists of its website and catalog orders.
For Fiscal Year 2023, J.Jill generated approximately 53% of total net sales through its Retail channel and approximately 47% of total net sales through its Direct channel. This balanced, omnichannel business model means J.Jill meets existing and prospective customers where and how they want to shop.
For Fiscal Year 2024, J.Jill generated approximately 52% of total net sales through its Retail channel and approximately 48% of total net sales through its Direct channel. This balanced, omnichannel business model means J.Jill meets existing and prospective customers where and how they want to shop.
The J.Jill website also provides customers with a broader range of colors and sizes than available in its stores. Competitive Strengths Distinct, Well-Recognized Brand. The J.Jill brand represents an easy, thoughtful and inspired style that celebrates the totality of all women and fuels her joy and impact with style.
The J.Jill website also provides customers with a broader range of styles than the stores and catalog. Competitive Strengths Distinct, Well-Recognized Brand. The J.Jill brand represents an easy, thoughtful and inspired style that celebrates the totality of all women and fuels her joy and impact with style.
In Fiscal Year 2023 approximately 80% of its products were sourced through agents and 20% were sourced directly from suppliers and factories. J.Jill works with several primary agents that help it identify quality suppliers and coordinate its manufacturing requirements.
In Fiscal Year 2024 approximately 81% of its products were sourced through agents and 19% were sourced directly from suppliers and factories. J.Jill works with several primary agents that help it identify quality suppliers and coordinate its manufacturing requirements.
Risk Factors for additional discussion related to our risks associated with the competition we face. 8 Human Capital Attracting, retaining, and developing a pool of talent with diverse backgrounds and experiences to drive the success of the J.Jill brand is a key element of its business strategy. As of February 3, 2024, J.Jill employed 1,115 full-time and 1,976 part-time associates.
Risk Factors for additional discussion related to our risks associated with the competition we face. 9 Human Capital Attracting, retaining, and developing a pool of talent with diverse backgrounds and experiences to drive the success of the J.Jill brand is a key element of its business strategy. As of February 1, 2025, J.Jill employed 1,123 full-time and 2,126 part-time associates.
References in this Annual Report to “Fiscal Year 2023” refer to the fiscal year ended February 3, 2024, references to “Fiscal Year 2022” refer to the fiscal year ended January 28, 2023, and references to “Fiscal Year 2021” refer to the fiscal year ended January 29, 2022.
References in this Annual Report to “Fiscal Year 2024” refer to the fiscal year ended February 1, 2025, references to “Fiscal Year 2023” refer to the fiscal year ended February 3, 2024, and references to “Fiscal Year 2022” refer to the fiscal year ended January 28, 2023.
It is designed with a fabric-first approach, reflected in simple designs, unique artisanal details, interesting textures, soft natural fabrics and dye and wash techniques. 4 Wearever : Wearever is all day refined dressing designed for work, travel and home.
Pure Jill : The highest expression of the J.Jill brand, Pure Jill reflects the art of understated ease. It is designed with a fabric-first approach, reflected in simple designs, unique artisanal details, interesting textures, soft natural fabrics and dye and wash techniques. 5 Wearever : Wearever is all day refined dressing designed for work, travel and home.
Her average tenure with the J.Jill brand is an industry-leading 10 plus years. Additionally, as J.Jill retains her over time, she tends to migrate from being a single channel customer to a more valuable omnichannel customer. Omnichannel customers comprised approximately 23% of J.Jill’s active customer base for Fiscal Years 2023 and approximately 22% for Fiscal Years 2022 and 2021, respectively.
Her average tenure with the J.Jill brand is an industry-leading 10 plus years. Additionally, as J.Jill retains her over time, she tends to migrate from being a single channel customer to a more valuable omnichannel customer.
J.Jill uses high quality fabrics and techniques for season-after-season comfort and style. J.Jill’s products are available across the full range of sizes including Regular, Petite and Tall, and it provides one, size-integrated shopping destination for customers with sizes from Extra Small up to 2X in store and 4X online.
J.Jill’s products are available across the full range of sizes including Regular, Petite and Tall, and it provides one, size-integrated shopping destination for customers with sizes from Extra Small up to 2X in store and 4X online. In addition to its core assortment, J.Jill has three sub-brands, Pure Jill, Wearever, and Fit.
J.Jill continues to invest in information systems and technology to enhance the customer experience and create operating efficiencies including the completion of the rollout of our new POS system during Fiscal Year 2023 and its initiative to upgrade its OMS system over the next two fiscal years.
Information Systems J.Jill uses information systems to support business intelligence and processes across its sales channels. J.Jill continues to invest in information systems and technology to enhance the customer experience and create operating efficiencies including completion of its OMS system upgrade in the next fiscal year.
Whether they are buying versatile work, comfortable travel, or premium casual clothes for attending occasions or meeting friends, J.Jill offers its customers a variety of options for different usage occasions. Pure Jill : The highest expression of the J.Jill brand, Pure Jill reflects the art of understated ease.
Each demonstrate a different design ethos and offers customers a mix of casual and refined apparel based on their needs. Whether they are buying versatile work, comfortable travel, or premium casual clothes for attending occasions or meeting friends, J.Jill offers its customers a variety of options for different usage occasions.
Removed
In addition to its core assortment, J.Jill has three sub-brands, Pure Jill, Wearever, and Fit. Each demonstrate a different design ethos and offers customers a mix of casual and refined apparel based on their needs.
Added
Omnichannel customers comprised approximately 24% of J.Jill’s active customer base for Fiscal Year 2024, approximately 23% for Fiscal Year 2023, and approximately 22% for Fiscal Year 2022. Product J.Jill’s products are marketed under the J.Jill brand name and sold primarily through two channels: its ecommerce platform and catalog (“Direct”) and its retail stores (“Retail”).
Removed
Information Systems J.Jill uses information systems to support business intelligence and processes across its sales channels.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

63 edited+31 added−17 removed220 unchanged
Biggest changeFailure to respond to changing customer preferences and fashion trends could also negatively impact our brand image with our customers and result in diminished brand loyalty. 10 Our ability to maintain our brand image, engage new and existing customers and gain market share could have a material adverse effect on our growth strategy and our business, financial condition and results of operations.
Biggest changeOur ability to maintain our brand image, engage new and existing customers and gain market share could have a material adverse effect on our growth strategy and our business, financial condition and results of operations. Our ability to maintain our brand image and reputation is integral to our business, as well as the implementation of our strategy to grow.
Some of the factors that might affect a supplier’s ability to ship orders of our merchandise in a timely manner or to meet our quality standards are outside of our control, including inclement weather, natural disasters, negative global climate patterns, political and financial instability, including the conflict in Ukraine and in the Middle East and the surrounding regions, and related 15 sanctions, legal and regulatory developments, strikes, health concerns regarding infectious diseases (such as the outbreak of COVID-19), and acts of terrorism.
Some of the factors that might affect a supplier’s ability to ship orders of our merchandise in a timely manner or to meet our quality standards are outside of our control, including inclement weather, natural disasters, negative global climate patterns, political and financial instability, including the conflict in Ukraine and in the Middle East and the surrounding regions, and related sanctions, legal and regulatory developments, strikes, health concerns regarding infectious diseases (such as the outbreak of COVID-19), and acts of terrorism.
Alleged violations of laws, regulations or contractual obligations relating to privacy and data protection, and 23 any relevant claims, may expose us to potential liability, require us to expend significant resources in responding to and defending such allegations and claims, and result in negative publicity and a loss of confidence in us by our customers, all of which could have an adverse effect on our business, financial condition and results of operations.
Alleged violations of laws, regulations or contractual obligations relating to privacy and data protection, and any relevant claims, may expose us to potential liability, require us to expend significant resources in responding to and defending such allegations and claims, and result in negative publicity and a loss of confidence in us by our customers, all of which could have an adverse effect on our business, financial condition and results of operations.
Competition for such qualified individuals and wage increases by other retailers could require us to pay higher wages to attract a sufficient number of employees. We are also dependent upon temporary personnel to adequately staff our stores and distribution and customer contact center, with 24 heightened dependence during busy periods such as the holiday season.
Competition for such qualified individuals and wage increases by other retailers could require us to pay higher wages to attract a sufficient number of employees. We are also dependent upon temporary personnel to adequately staff our stores and distribution and customer contact center, with heightened dependence during busy periods such as the holiday season.
In addition, new and enhanced technologies, including search, web and infrastructure computing services, digital content, and electronic devices, may increase our competition. The internet and other new technologies facilitate competitive entry and 11 comparison shopping, and increased competition may reduce our sales and profits. We strive to offer an omnichannel shopping experience for our customers that enhances their shopping experiences.
In addition, new and enhanced technologies, including search, web and infrastructure computing services, digital content, and electronic devices, may increase our competition. The internet and other new technologies facilitate competitive entry and comparison shopping, and increased competition may reduce our sales and profits. We strive to offer an omnichannel shopping experience for our customers that enhances their shopping experiences.
This could lead to inventory issues, increased costs, lower sales adversely impact brand loyalty and customer satisfaction, among other things, which could adversely affect our business, financial condition and results of operations. 17 War, terrorism, acts of piracy, civil unrest or other violence may negatively impact availability of merchandise and/or otherwise adversely impact our business.
This could lead to inventory issues, increased costs, lower sales adversely impact brand loyalty and customer satisfaction, among other things, which could adversely affect our business, financial condition and results of operations. War, terrorism, acts of piracy, civil unrest or other violence may negatively impact availability of merchandise and/or otherwise adversely impact our business.
From time to time, we may publish statements relating to our commitment to responsible business, including commitments relating to greenhouse gas (“GHG”) emissions. Such statements reflect the Company’s current plans and aspirations at the time they are made, and should not be construed as guarantees or that we will be able to achieve them.
From time to time, we may publish statements relating to our commitment to responsible business, including commitments relating to greenhouse gas emissions. Such statements reflect the Company’s current plans and aspirations at the time they are made, and should not be construed as guarantees or that we will be able to achieve them.
These charter provisions may limit the ability of third parties to acquire control of our company. 20 We are a holding company and rely on dividends, distributions and other payments, advances and transfers of funds from our subsidiaries to meet our obligations. We are a holding company that does not conduct any business operations of our own.
These charter provisions may limit the ability of third parties to acquire control of our company. We are a holding company and rely on dividends, distributions and other payments, advances and transfers of funds from our subsidiaries to meet our obligations. We are a holding company that does not conduct any business operations of our own.
Such systems are subject to damage or interruption from 22 power outages, computer and telecommunications failures, computer viruses, security breaches and natural disasters. Damage to or interruption of our information technology systems may require a significant investment to fix or replace the affected system, and we may suffer interruptions in our operations as a result.
Such systems are subject to damage or interruption from power outages, computer and telecommunications failures, computer viruses, security breaches and natural disasters. Damage to or interruption of our information technology systems may require a significant investment to fix or replace the affected system, and we may suffer interruptions in our operations as a result.
It is difficult to predict when or for how long any of these conditions can affect our business and a prolonged economic downturn could have a material adverse effect on our business, financial condition and results of operations. Disruption in the economy may further affect our business, results of operations, liquidity, and financial results.
It is difficult to predict when or for how long any of these conditions can affect our business and a prolonged economic downturn could have a material adverse effect on our business, financial condition and results of operations. 11 Disruption in the economy may further affect our business, results of operations, liquidity, and financial results.
We obtain a significant amount of traffic via search engines and rely on search engines such as Google, Yahoo! and Bing. Search engines frequently update and change the logic that determines the placement and display of results of a user’s search and the purchased or algorithmic placement of links to our site can be negatively affected.
We obtain a significant amount of traffic via search engines and rely on search engines such as Google, Yahoo! and Bing. Search 12 engines frequently update and change the logic that determines the placement and display of results of a user’s search and the purchased or algorithmic placement of links to our site can be negatively affected.
If we are unable to successfully manage these complexities, it may have a material adverse effect on our business, financial condition and results of operations. 14 Relying on third-party service providers, such as Federal Express, UPS Mail Innovations and the U.S.
If we are unable to successfully manage these complexities, it may have a material adverse effect on our business, financial condition and results of operations. Relying on third-party service providers, such as Federal Express, UPS Mail Innovations and the U.S.
The projections of future cash flows used in these analyses require the use of judgment and a number of estimates and projections of future 25 operating results. If actual results differ from our estimates, additional charges for asset impairments may be required in the future. If future impairment charges are significant, our reported operating results would be adversely affected.
The projections of future cash flows used in these analyses require the use of judgment and a number of estimates and projections of future operating results. If actual results differ from our estimates, additional charges for asset impairments may be required in the future. If future impairment charges are significant, our reported operating results would be adversely affected.
Our certificate of incorporation authorizes us to issue, without the approval of our stockholders, one or more classes or series of preferred stock having such designations, preferences, limitations and relative rights, including preferences over our common stock respecting dividends and distributions, as our board of directors may determine.
Our certificate of incorporation authorizes us to issue, without the approval of our stockholders, one or more classes or series of preferred stock having such designations, preferences, limitations and relative rights, including preferences over our common stock respecting dividends and distributions, as our Board may determine.
For certain payment methods, including credit and debit cards, we pay interchange and other fees, which may increase over time, thereby raising our operating costs and lowering profitability. We rely on third-party service providers for payment processing services, including the processing of credit and debit cards.
For certain payment methods, 16 including credit and debit cards, we pay interchange and other fees, which may increase over time, thereby raising our operating costs and lowering profitability. We rely on third-party service providers for payment processing services, including the processing of credit and debit cards.
Any of these events could have a material adverse effect on our reputation, business, financial condition and results of operations. 16 Relying on third parties to provide services in connection with certain aspects of our business, and any failure by these third parties to perform their obligations could have an adverse effect on our business, financial condition and results of operations.
Any of these events could have a material adverse effect on our reputation, business, financial condition and results of operations. Relying on third parties to provide services in connection with certain aspects of our business, and any failure by these third parties to perform their obligations could have an adverse effect on our business, financial condition and results of operations.
If we are unable to hire and retain store personnel capable of consistently providing a high level of customer service, our ability to open new stores and operate existing stores may be impaired and our performance and brand image may be negatively impacted.
If we are unable to hire and retain store personnel capable 26 of consistently providing a high level of customer service, our ability to open new stores and operate existing stores may be impaired and our performance and brand image may be negatively impacted.
Litigation matters may include, 26 among other things, government and agency investigations, employment, commercial, intellectual property, tort, advertising and stockholder claims. We cannot predict with certainty the outcomes of these legal proceedings and other contingencies.
Litigation matters may include, among other things, government and agency investigations, employment, commercial, intellectual property, tort, advertising and stockholder claims. We cannot predict with certainty the outcomes of these legal proceedings and other contingencies.
Further, it is unclear how the laws and regulations relating to the collection, process and use of personal data will further develop in the United States, and to what extent this may affect our operations in the future.
Further, it is unclear how 25 the laws and regulations relating to the collection, process and use of personal data will further develop in the United States, and to what extent this may affect our operations in the future.
Furthermore, many of our expenses and investments 13 are fixed, and we may not be able to adjust our spending in a timely manner to compensate for any unexpected shortfall in our net sales results.
Furthermore, many of our expenses and investments are fixed, and we may not be able to adjust our spending in a timely manner to compensate for any unexpected shortfall in our net sales results.
Our certificate of incorporation authorizes our board of directors to issue preferred stock without stockholder approval. If the board of directors elects to issue preferred stock, it could be more difficult for a third party to acquire us.
Our certificate of incorporation authorizes our Board to issue preferred stock without stockholder approval. If the Board elects to issue preferred stock, it could be more difficult for a third party to acquire us.
We could also experience operational difficulties with our suppliers, such as reductions in the availability of production capacity, supply chain disruptions, errors in complying with merchandise specifications, insufficient quality control, shortages of fabrics or other raw materials, failures to meet production deadlines or increases in manufacturing costs. Currently, we source our imported merchandise from 11 countries.
We could also experience operational difficulties with our suppliers, such as reductions in the availability of production capacity, supply chain disruptions, errors in complying with merchandise specifications, insufficient quality control, shortages of fabrics or other raw materials, failures to meet production deadlines or increases in manufacturing costs. Currently, we source our imported merchandise from 10 countries.
A securities class action lawsuit, if instituted against us, 21 could result in substantial costs, divert our management’s attention and resources and harm our business, financial condition and results of operations. If securities or industry analysts do not publish research or reports about our business or publish negative reports, our stock price could decline.
A securities class action lawsuit, if instituted against us, could result in substantial costs, divert our management’s attention and resources and harm our business, financial condition and results of operations. 23 If securities or industry analysts do not publish research or reports about our business or publish negative reports, our stock price could decline.
In particular, the level of customer traffic and volume of customer purchases through our Direct channel, which accounted for approximately 47% of our total net sales for Fiscal Year 2023, is substantially dependent on our ability to provide a content-rich and user-friendly website, widely distributed and informative catalogs, a fun, easy and hassle-free customer experience and reliable delivery of our merchandise.
In particular, the level of customer traffic and volume of customer purchases through our Direct channel, which accounted for approximately 48% of our total net sales for Fiscal Year 2024, is substantially dependent on our ability to provide a content-rich and user-friendly website, widely distributed and informative catalogs, a fun, easy and hassle-free customer experience and reliable delivery of our merchandise.
As a result, we are largely dependent upon cash dividends and distributions and other transfers from our subsidiaries to meet our obligations. The agreements governing the indebtedness of our subsidiaries impose restrictions on our subsidiaries’ ability to pay dividends or other distributions to us.
As a result, we are largely dependent upon cash dividends and distributions and other transfers from our subsidiaries to meet our obligations. The agreements governing the indebtedness of our operating subsidiaries impose restrictions on our operating subsidiaries’ ability to pay dividends or other distributions to us as a holding company.
In addition, costs and interruptions associated with the implementation of new or upgraded systems and technology, such as our new POS system or with maintenance or adequate support of existing systems could also disrupt or reduce the efficiency of our operations.
In addition, costs and interruptions associated with the 24 implementation of new or upgraded systems and technology, such as our recently implemented POS system or with maintenance or adequate support of existing systems could also disrupt or reduce the efficiency of our operations.
Sales through our Direct channel, of which our ecommerce business constitutes the vast majority, accounted for approximately 47% of our total net sales for Fiscal Year 2023. Our business, financial condition and results of operations are dependent on maintaining our ecommerce business and expanding this business is an important part of our strategy to grow through our omnichannel operations.
Sales through our Direct channel, of which our ecommerce business constitutes the vast majority, accounted for approximately 48% of our total net sales for Fiscal Year 2024. Our business, financial condition and results of operations are dependent on maintaining our ecommerce business and expanding this business is an important part of our strategy to grow through our omnichannel operations.
Our goodwill and indefinite-lived intangible assets, which consist of goodwill from the controlling interest in the company held by JJill Holdings, Inc. and JJill Topco Holdings, LP, and our trade name, represented a significant portion of our total assets as of February 3, 2024.
Our goodwill and indefinite-lived intangible assets, which consist of goodwill from the controlling interest in the company held by JJill Holdings, Inc. and JJill Topco Holdings, LP, and our trade name, represented a significant portion of our total assets as of February 1, 2025.
The top three by volume are India, Indonesia, and Vietnam and we also source some merchandise from China. In Fiscal Year 2023, approximately 46% of our products were sourced in southeast Asia.
The top three by volume are India, Indonesia, and Vietnam and we also source some merchandise from China. In Fiscal Year 2024, approximately 50% of our products were sourced in southeast Asia.
We do not own or operate any manufacturing facilities and therefore depend upon independent, third-party suppliers for the manufacturing of all our merchandise, primarily through our use of buying agents. In Fiscal Year 2023, approximately 80% of our products were sourced through agents and approximately 20% were sourced directly from suppliers and factories.
We do not own or operate any manufacturing facilities and therefore depend upon independent, third-party suppliers for the manufacturing of all our merchandise, primarily through our use of buying agents. In Fiscal Year 2024, approximately 81% of our products were sourced through agents and approximately 19% were sourced directly from suppliers and factories.
As of February 3, 2024, we had $168.4 million aggregate principal amount of borrowings under the Credit Agreements. If our cash flows and capital resources are insufficient to fund our debt service obligations, we may be forced to 18 reduce or delay investments and capital expenditures or to sell assets, seek additional capital or restructure or refinance our indebtedness.
As of February 1, 2025, we had $74.3 million aggregate principal amount of borrowings under the Credit Agreements. If our cash flows and capital resources are insufficient to fund our debt service obligations, we may be forced to reduce or delay investments and capital expenditures or to sell assets, seek additional capital or restructure or refinance our indebtedness.
In Fiscal Year 2023, the Company reduced the net carrying value of certain long-lived assets to their estimated fair value, which was determined using a discounted cash flows method. The Company incurred $0.2 million of impairment charges related primarily to leasehold improvements.
In Fiscal Year 2024, the Company reduced the net carrying value of certain long-lived assets to their estimated fair value, which was determined using a discounted cash flows method. The Company incurred $0.8 million of impairment charges related primarily to leasehold improvements and right-of-use assets.
Having a substantial amount of indebtedness under our Credit Agreements which matures in the near term, and the scheduled maturity dates are in close proximity to each other. We have a substantial amount of indebtedness under our Credit Agreements, and the scheduled maturity dates of our Credit Agreements are in close proximity to each other.
We have a substantial amount of indebtedness under our Credit Agreements, and the scheduled maturity dates of our Credit Agreements are in close proximity to each other.
We are subject to risks related to the operation of our retail stores such as failure of our technology infrastructure or the computer systems that operate our POS system and their related support systems, causing, among other things, downtimes, telecommunications issues or other technical failures, the reliance on third-party computer hardware/software providers, as well as risks related to data protection, credit card fraud, and cyber security and vulnerability to electronic break-ins and other similar disruptions.
We are subject to risks related to the operation of our retail stores such as failure of our technology infrastructure or the computer systems that operate our POS system and their related support systems, causing, among other things, downtimes, telecommunications issues or other technical failures, the reliance on third-party computer hardware/software providers, as well as risks related to data protection, credit card fraud, and cyber security and vulnerability to electronic break-ins and other similar disruptions. 14 Our future growth strategy also depends, in part, on our ability to optimize and profitably operate our stores and to close underperforming stores.
Furthermore, many of our suppliers rely on working capital financing to support their operations. To the extent any of our suppliers are unable to obtain adequate credit or their borrowing costs increase, we may experience delays in obtaining merchandise, our suppliers increasing their prices or our suppliers modifying payment terms in a manner that is unfavorable to us.
To the extent any of our suppliers are unable to obtain adequate credit or their borrowing costs increase, we may experience delays in obtaining merchandise, our suppliers increasing their prices or our suppliers modifying payment terms in a manner that is unfavorable to us.
Our future growth strategy also depends, in part, on our ability to optimize and profitably operate our stores and to close underperforming stores. We may not be able to optimize our store base by profitably operating stores and closing stores that are unprofitable, and this could have a material adverse impact on our business, financial condition and results of operations.
We may not be able to optimize our store base by profitably operating stores and closing stores that are unprofitable, and this could have a material adverse impact on our business, financial condition and results of operations.
Our ability to enter into new leases or renew existing leases on terms acceptable to us or be released from our obligations under leases for stores that we close could have a material adverse effect on our business, financial condition and results of operations.
Our ability to enter into new leases or renew existing leases on terms acceptable to us or be released from our obligations under leases for stores that we close could have a material adverse effect on our business, financial condition and results of operations. 15 Our ability to manage our inventory levels, size assortments and merchandise mix, including with respect to our omnichannel retail operations, could have a material adverse effect on our business, financial condition and results of operations.
Debt for additional information on repayment of the Subordinated Credit Agreement. Our certificate of incorporation contains a provision renouncing our interest and expectancy in certain corporate opportunities. Our certificate of incorporation provides for the allocation of certain corporate opportunities between us and TowerBrook.
Our certificate of incorporation contains a provision renouncing our interest and expectancy in certain corporate opportunities. Our certificate of incorporation provides for the allocation of certain corporate opportunities between us and TowerBrook.
In challenging and uncertain economic environments, we cannot predict when macroeconomic uncertainty may arise, whether or when such circumstances may improve or worsen, or what impact such circumstances could have on our business.
Adverse macroeconomic changes could reduce consumer confidence and could thereby negatively affect our operating results. In challenging and uncertain economic environments, we cannot predict when macroeconomic uncertainty may arise, whether or when such circumstances may improve or worsen, or what impact such circumstances could have on our business.
See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—General.” The deterioration of the earnings from, or other available assets of, our subsidiaries for any reason could also limit or impair their ability to pay dividends or other distributions to us.
See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—General.” The deterioration of the earnings from, or other available assets of, our subsidiaries for any reason could also limit or impair their ability to pay dividends or other distributions to us. 22 Future sales of our common stock in the public market, or the perception in the public market that such sales may occur, could reduce our stock price.
Our failure to successfully address and respond to these risks and uncertainties related to our ecommerce business could negatively impact sales, increase costs, diminish our growth prospects and damage the reputation of our brand, each of which could have a material adverse effect on our business, financial condition and results of operations.
Our failure to successfully address and respond to these risks and uncertainties related to our ecommerce business could negatively impact sales, increase costs, diminish our growth prospects and damage the reputation of our brand, each of which could have a material adverse effect on our business, financial condition and results of operations. 13 Our business depends on effective marketing and increasing customer traffic and the success of our Direct channel depends on customers’ use of our website and response to catalogs and digital marketing.
Our ability to maintain our brand image and reputation is integral to our business, as well as the implementation of our strategy to grow. Maintaining, promoting and growing our brand will depend largely on the success of our design, merchandising and marketing efforts and our ability to provide a consistent, high-quality customer experience.
Maintaining, promoting and growing our brand will depend largely on the success of our design, merchandising and marketing efforts and our ability to provide a consistent, high-quality customer experience.
Item 1A. Ri sk Factors Risks Related to Our Business, Industry and Strategy Our business is sensitive to macroeconomic conditions and we rely on consumer discretionary spending, which means we may be adversely affected by economic downturns and other macroeconomic conditions or trends.
Risks Related to Our Business, Industry and Strategy Our business is sensitive to macroeconomic conditions and we rely on consumer discretionary spending, which means we may be adversely affected by economic downturns and other macroeconomic conditions or trends. Our business and operating results are subject to national and global economic conditions and their impact on consumer discretionary spending.
Labor organizing and other activities could negatively impact us. Currently, none of our employees are represented by a union. However, our employees have the right at any time to form or affiliate with a union.
To the extent we do not effectively hire, onboard, retain and motivate key employees, our business can be harmed. Labor organizing and other activities could negatively impact us. Currently, none of our employees are represented by a union. However, our employees have the right at any time to form or affiliate with a union.
Furthermore, economic conditions in certain regions may also be affected by natural disasters, such as hurricanes, tropical storms, earthquakes, and wildfires; public health crises; and other major unforeseen events. Adverse macroeconomic changes could reduce consumer confidence and could thereby negatively affect our operating results.
Furthermore, economic conditions in certain regions may also be affected by natural disasters, such as hurricanes, tropical storms, earthquakes, and wildfires; public health crises; and other major unforeseen events.
Risks Related to Our Indebtedness The terms of our term loan credit agreement and asset-based revolving credit facility restrict our operational and financial flexibility, which could adversely affect our ability to respond to changes in our business and to manage our operations.
Additionally, we may face increased scrutiny related to any third party sustainability ratings we receive, which could adversely affect our reputation, business, and results of operations. 19 Risks Related to Our Indebtedness The terms of our term loan credit agreement and asset-based revolving credit facility restrict our operational and financial flexibility, which could adversely affect our ability to respond to changes in our business and to manage our operations.
Unseasonal or severe weather conditions may adversely affect our merchandise sales. Our business is adversely affected by unseasonal weather conditions. Sales of certain seasonal apparel items are dependent in part on the weather and may decline when weather conditions do not favor the use of this apparel.
Sales of certain seasonal apparel items are dependent in part on the weather and may decline when weather conditions do not favor the use of this apparel.
These financing risks, in addition to potential rising interest rates and changes in market conditions, if realized, could negatively impact our business, financial condition and results of operations. See Note 9. Debt to the audited consolidated financial statements included in this Annual Report for more information on our indebtedness.
These financing risks, in addition to potential rising interest rates and changes in market conditions, if realized, could negatively impact our business, financial condition and results of operations. See Note 9.
The market price of our common stock could vary significantly as a result of a number of factors, some of which are beyond our control. In the event of a drop in the market price of our common stock, you could lose a substantial part or all of your investment in our common stock.
In the event of a drop in the market price of our common stock, you could lose a substantial part or all of your investment in our common stock.
Risks Related to Legal, Regulatory, Accounting and Compliance Matters Changes to estimates related to our property, fixtures and equipment or operating results that are lower than our current estimates at certain store locations may cause us to incur impairment charges on certain long-lived assets, which may adversely affect our results of operations.
In addition, any payments we are required to make and any injunction we are required to comply with as a result of such infringement could have a material adverse effect on our business, financial condition and results of operations. 27 Risks Related to Legal, Regulatory, Accounting and Compliance Matters Changes to estimates related to our property, fixtures and equipment or operating results that are lower than our current estimates at certain store locations may cause us to incur impairment charges on certain long-lived assets, which may adversely affect our results of operations.
In addition, there exists certain “anti-ESG” sentiment among some individuals and government institutions, and we may also face scrutiny, reputational risk, lawsuits or market access restrictions from these parties regarding our ESG initiatives. Additionally, we may face increased scrutiny related to any third party sustainability ratings we receive, which could adversely affect our reputation, business, and results of operations.
In addition, there exists certain “anti-ESG” sentiment among some individuals and government institutions, and we may also face scrutiny, reputational risk, lawsuits or market access restrictions from these parties regarding our ESG initiatives.
Failures by these shipping companies to deliver our merchandise to us or lack of capacity in the shipping industry could lead to delays in receipt of our merchandise or increased expense in the delivery of our merchandise. Any of these developments could have a material adverse effect on our business, financial condition and results of operations.
Failures by these shipping companies to deliver our merchandise to us or lack of capacity in the shipping industry could lead to delays in receipt of our merchandise or increased expense in the delivery of our merchandise.
If the performance of our website, catalogs and email declines, or if our overall marketing strategy is not successful, it could have a material adverse effect on our business, financial condition and results of operations. 12 Our growth strategy depends in part on our ability to open and operate new retail stores on a profitable basis, and our ability to identify and close retail stores that are no longer profitable, and if we are not successful in executing our Retail channel strategy to optimize profitability, our growth and profitability could be adversely impacted.
Our growth strategy depends in part on our ability to open and operate new retail stores on a profitable basis, and our ability to identify and close retail stores that are no longer profitable, and if we are not successful in executing our Retail channel strategy to optimize profitability, our growth and profitability could be adversely impacted.
We are subject to laws and regulations in the jurisdictions in which we operate and changes to the regulatory environment in which we operate or failure to comply with applicable laws and regulations could adversely affect our business, financial condition and results of operations.
We may not be able to conclude on an ongoing basis that we have effective internal control over financial reporting in accordance with Section 404 of the Sarbanes-Oxley Act. 28 We are subject to laws and regulations in the jurisdictions in which we operate and changes to the regulatory environment in which we operate or failure to comply with applicable laws and regulations could adversely affect our business, financial condition and results of operations.
Exercise of the warrants and sales of significant amounts of stock in the public market could adversely affect prevailing market prices of our common stock. Our stock price has been and may continue to be volatile and there can be no assurances that a viable public market for our common stock will be maintained.
Our stock price has been and may continue to be volatile and there can be no assurances that a viable public market for our common stock will be maintained. The market price of our common stock could vary significantly as a result of a number of factors, some of which are beyond our control.
These countries may present other risks with regard to infrastructure available to support manufacturing, labor and employee relations, political and economic stability, corruption, regulatory, environmental, health and safety compliance. While we endeavor to monitor and audit facilities where our production is done, any significant events with factories we use can adversely impact our reputation, brand and product delivery.
These countries may present other risks with regard to infrastructure available to support manufacturing, labor and employee relations, political and economic stability, corruption, regulatory, environmental, health and safety compliance.
TowerBrook controls a majority of the voting power of our outstanding voting stock, and as a result we are a controlled company within the meaning of the NYSE corporate governance standards.
The Equity Offering resulted in the dilution of TowerBrook’s ownership and voting power in the Company. As a result, TowerBrook no longer controls a majority of the voting power of the Company’s outstanding voting stock and, therefore, the Company no longer qualifies as a “controlled company” within the meaning of the NYSE corporate governance standards.
The number of outstanding shares of common stock includes 5,817,375 shares, including shares controlled by TowerBrook, that are “restricted securities,” as defined under Rule 144 under the Securities Act, and eligible for sale in the public market subject to the requirements of Rule 144. The Subordinated Lenders have been issued warrants under the prior Subordinated Term Loan Facility.
We have 15,324,222 outstanding shares of common stock as of February 1, 2025. The number of outstanding shares of common stock includes 7,338,933 shares owned by TowerBrook, as defined under Rule 144 under the Securities Act, and eligible for sale in the public market subject to the requirements of Rule 144.
We are a “smaller reporting company” within the meaning of the Securities Act of 1933, as amended (the “Securities Act”) and are taking advantage of reduced disclosure requirements applicable to “smaller reporting companies,” which could make our common stock less attractive to investors and make it more difficult to compare our performance with other public companies.
As of the fiscal year beginning February 2, 2025, we are no longer a “smaller reporting company” within the meaning of the Securities Act of 1933, as amended (the “Securities Act”) and can no longer take advantage of reduced disclosure requirements applicable to “smaller reporting companies,” which will require additional cost and resources in order to comply with our reporting obligations.
We are a “smaller reporting company,” as defined in Item 10(f)(1) of Regulation S-K. Smaller reporting companies may take advantage of certain reduced disclosure obligations, including, among other things, ability to provide simplified executive compensation information.
As of February 2, 2025, we are no longer a “smaller reporting company,” as defined in Item 10(f)(1) of Regulation S-K and can no longer take advantage of scaled disclosure and reporting requirements. As a result, the cost and resources necessary to comply with our SEC reporting obligations will increase.
These requirements will not apply to us for so long as we remain a controlled company. Accordingly, you may not have the same protections afforded to stockholders of companies that are subject to all of the corporate governance requirements of the NYSE.
Until we are fully subject to these requirements, our stockholders will not have the same protections afforded to stockholders of companies that are subject to all of the corporate governance requirements of the NYSE. Dividends and share repurchases are subject to uncertainty and could be modified, accelerated, or discontinued, which could affect the price of our common stock.
Our maintenance of a robust customer database has also been a key component of our overall strategy.
Our maintenance of a robust customer database has also been a key component of our overall strategy. If the performance of our website, catalogs and email declines, or if our overall marketing strategy is not successful, it could have a material adverse effect on our business, financial condition and results of operations.
Our ability to manage our inventory levels, size assortments and merchandise mix, including with respect to our omnichannel retail operations, could have a material adverse effect on our business, financial condition and results of operations.
Any of these developments could have a material adverse effect on our business, financial condition and results of operations. 18 Unseasonal or severe weather conditions may adversely affect our merchandise sales. Our business is adversely affected by unseasonal weather conditions.
Removed
Our business and operating results are subject to national and global economic conditions and their impact on consumer discretionary spending.
Added
Item 1A. Ri sk Factors Investing in our common stock involves a high degree of risk. You should consider and carefully read all of the risks and uncertainties described below, as well as other information included in this Annual Report and in our other public filings. The risks described below are not the only ones facing us.
Removed
Our business depends on effective marketing and increasing customer traffic and the success of our Direct channel depends on customers’ use of our website and response to catalogs and digital marketing. We have many initiatives in our marketing programs.
Added
The occurrence of any of the following risks or additional risks and uncertainties not presently known to us or that we currently believe to be immaterial could materially and adversely affect our business, financial condition or results of operations.
Removed
We will remain a smaller reporting company until the last day of the fiscal year in which (i) the market value of our common stock held by non-affiliates is greater than or equal to $250 million as of the end of that fiscal year’s second fiscal quarter, or (ii) our annual revenues are greater than or equal to $100 million during the last completed fiscal year and the market value of our common stock held by non-affiliates exceeds $700 million as of the end of that fiscal year’s second fiscal quarter.
Added
In such case, the trading price of our common stock could decline, and you may lose all or part of your original investment. This Annual Report also contains forward-looking statements and estimates that involve risks and uncertainties.
Removed
For so long as we continue to be a smaller reporting company, we intend to take advantage of these reduced disclosure obligations. We are a “controlled company” within the meaning of the NYSE rules and, as a result, qualify for and intend to rely on exemptions from certain corporate governance requirements.
Added
Our actual results could differ materially from those anticipated in the forward-looking statements as a result of specific factors, including the risks and uncertainties described below.
Removed
Under the NYSE rules, a company of which 19 more than 50% of the voting power is held by another person or group of persons acting together is a controlled company and may elect not to comply with certain corporate governance requirements, including the requirements that: • a majority of the board of directors consist of independent directors; • the nominating and corporate governance committee be composed entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities; • the compensation committee be composed entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities; and • there be an annual performance evaluation of the nominating and corporate governance and compensation committees.
Added
The current domestic and international political environment, including volatile trade relations, conflicts in multiple locations, and the related disruption to shipping lanes (for example in the Red Sea and surrounding areas) and civil unrest have resulted in uncertainty surrounding the future state of the global economy.
Removed
We continue to be controlled by TowerBrook, and TowerBrook’s interests may conflict with our interests and the interests of other stockholders. TowerBrook owns a majority of our common stock.
Added
There is uncertainty with respect to potential changes in trade regulations, sanctions and export controls, which increase volatility in the global economy and foreign currency exchange rates. This environment has affected and may continue to affect production and distribution lead times, increasing our costs and potentially affecting our ability to meet customer demand.
Removed
As a result, TowerBrook will have effective control over the outcome of votes on all matters requiring approval by our stockholders, including entering into significant corporate transactions such as mergers, tender offers and the sale of all or substantially all of our assets and issuance of additional debt or equity.
Added
If these disruptions persist, they may require us to modify our current sourcing practices, which may impact our product costs, and, if not mitigated, could have a material adverse effect on our business and results of operations.
Removed
In addition, as long as TowerBrook beneficially owns at least 50% of our common stock, the Stockholders Agreement provides TowerBrook with veto rights with respect to certain material matters. The interests of TowerBrook and its affiliates could conflict with or differ from our interests or the interests of our other stockholders.
Added
Additionally, other macroeconomic developments, such as efforts of governments to stimulate or stabilize the economy, international conflicts, trade disputes, sanctions, increased tariffs internationally, including between the United States and China and on imports into the United States from various countries may impact our business in an adverse manner, whether directly or indirectly, such as through their impacts on the financial positions and operations of our customers, suppliers, and other third parties with whom we do business.
Removed
For example, the concentration of ownership held by TowerBrook could delay, defer or prevent a change of control of our company or impede a merger, takeover or other business combination which may otherwise be favorable for us.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeThis program includes both a cyber team led by our Chief Information Officer (“CIO”), as well as an Enterprise Risk Management (“ERM”) program led by our head of compliance. Our CIO has 30 years of information technology experience, including over 3 years of direct oversight of information security.
Biggest changeThis program includes both a cyber team led by our Chief Information Officer ( “CIO”), as well as an Enterprise Risk Management (“ERM” ) program led by our head of compliance . Our CIO has over 30 years of information technology experience, including over 4 years of direct oversight of information security.
The goal of this team is to lower the impact and likelihood of persistent threats to the extent feasible, including safeguarding of key information and the integrity of key systems. We also partner with third-party vendors to enhance our program including monitoring, pen testing, and other 27 assessments and programs.
The goal of this team is to lower the impact and likelihood of persistent threats to the extent feasible, including safeguarding of key information and the integrity of key systems. We also partner with third-party vendors to enhance our program including monitoring, pen testing, and other assessments and programs.
Risk oversight for both our cyber and ERM programs is primarily the responsibility of the Audit Committee of the Board of Directors who receive quarterly updates, at a minimum, with additional updates shared to the full Board of Directors on a recurring basis.
Risk oversight for both our cyber and ERM programs is primarily the responsibility of the Audit Committee of the Board who receive quarterly updates, at a minimum, with additional updates shared to the full Board on a recurring basis.
A cybersecurity incident impacting us or any of these entities could materially affect our operations, performance, or financial results. See Item 1A, Risks Related to Information Security for additional details. The governance of our risk management program is a partnership between our cross functional management team and our Board of Directors.
A cybersecurity incident impacting us or any of 29 these entities could materially affect our operations, performance, or financial results. See Item 1A, Risks Related to Information Security for additional details. The governance of our risk management program is a partnership between our cross functional management team and our Board.
In the event a cyber incident should occur, there are additional steps taken to mitigate cybersecurity risks and incidents. As of the date of this filing, we are not aware of any current cybersecurity threats or cybersecurity incidents that have materially affected or are reasonably likely to materially affect our business, results of operations or financial condition.
In the event a cyber incident should occur, there are additional steps taken to mitigate cybersecurity risks and incidents. As of the date of this filing, we are no t aware of any current cybersecurity threats or cybersecurity incidents that have materially affected or are reasonably likely to materially affect our business, results of operations or financial condition.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeThe current terms of our leases expire as follows: Fiscal Years Lease Terms Expire Number of Stores 2023 – 2025 106 2026 – 2028 113 2029 – 2031 20 2032 and later 5 The table below sets forth the number of retail stores by state that we operated as of February 3, 2024.
Biggest changeThe current terms of our leases expire as follows: Fiscal Years Lease Terms Expire Number of Stores 2024 – 2026 112 2027 – 2029 115 2030 – 2032 10 2033 and later 15 30 The table below sets forth the number of retail stores by state that we operated as of February 1, 2025.
The average size of our stores is approximately 3,700 square feet. All of our retail stores are leased from third parties and new stores historically have had terms of ten years. The weighted-average remaining lease term is 2 years. A portion of our leases have options to renew for periods up to five years.
The average size of our stores is approximately 3,700 square feet. All of our retail stores are leased from third parties and new stores historically have had terms of ten years. The weighted-average remaining lease term is 2.93 years. A portion of our leases have options to renew for periods up to five years.
Number Number Number State of Stores State of Stores State of Stores Alabama 5 Kentucky 2 New York 12 Arizona 5 Louisiana 5 North Carolina 9 Arkansas 3 Maine 1 Ohio 8 California 21 Maryland 6 Oklahoma 3 Colorado 5 Massachusetts 11 Oregon 5 Connecticut 7 Michigan 8 Pennsylvania 13 Delaware 1 Minnesota 6 Rhode Island 1 Florida 10 Mississippi 2 South Carolina 5 Georgia 10 Missouri 4 Tennessee 8 Idaho 1 Nebraska 1 Texas 15 Illinois 12 Nevada 2 Utah 1 Indiana 3 New Hampshire 1 Virginia 7 Iowa 2 New Jersey 11 Washington 5 Kansas 2 New Mexico 1 Wisconsin 4 28
Number Number Number State of Stores State of Stores State of Stores Alabama 5 Kentucky 2 New York 12 Arizona 5 Louisiana 5 North Carolina 8 Arkansas 3 Maine 1 Ohio 8 California 21 Maryland 6 Oklahoma 3 Colorado 7 Massachusetts 12 Oregon 5 Connecticut 7 Michigan 8 Pennsylvania 13 Delaware 1 Minnesota 6 Rhode Island 1 Florida 13 Mississippi 2 South Carolina 5 Georgia 11 Missouri 4 Tennessee 8 Idaho 1 Nebraska 1 Texas 15 Illinois 13 Nevada 2 Utah 1 Indiana 3 New Hampshire 1 Virginia 8 Iowa 2 New Jersey 11 Washington 5 Kansas 2 New Mexico 1 Wisconsin 4
We consider these properties to be in good condition and believe that our facilities are adequate for operations and provide sufficient capacity to meet our anticipated future requirements. As of February 3, 2024, we operated 244 stores in 42 states. Of these stores, approximately half are located in lifestyle centers and half in premium malls.
We consider these properties to be in good condition and believe that our facilities are adequate for operations and provide sufficient capacity to meet our anticipated future requirements. As of February 1, 2025, we operated 252 stores in 42 states. Of these stores, approximately half are located in lifestyle centers and half in premium malls.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Removed
Item 3. Legal Proceedings We are not presently party to any legal proceedings the resolution of which we believe would have a material adverse effect on our business, financial condition, operating results or cash flows. We establish reserves for specific legal matters when we determine that the likelihood of an unfavorable outcome is probable and the loss is reasonably estimable.
Added
Item 3. Legal Proceedings On December 19, 2024, the Paul Berger Revocable Trust, a purported stockholder of J.Jill, (“Plaintiff”) filed a putative class action and derivative complaint (“Complaint”) in the Court of Chancery of the State of Delaware (“Court”), captioned The Paul Berger Revocable Trust v. Rahamim, et al., C.A. No. 2024-1318-JTL (Del. Ch.).
Removed
Item 4. Mine Saf ety Disclosures Not applicable. 29 PART II
Added
The Complaint alleged that certain members of the Company’s board of directors breached their fiduciary duties in connection with approving a stock repurchase program in December 2024 that authorized the use of up to $25 million to repurchase J.Jill stock. The Complaint also asserted a claim against TowerBrook Capital Partners L.P.
Added
(“TowerBrook”) for aiding and abetting the individual defendants’ alleged breaches of fiduciary duty. Plaintiff alleged that the repurchase program could have transferred majority voting control of J.Jill to TowerBrook. The individual defendants and TowerBrook believe that the allegations of the Complaint were meritless, denied and continue to deny those allegations, and deny that any violation of applicable law has occurred.
Added
However, solely to minimize expenses and distraction and to avoid the uncertainty of any litigation, on February 24, 2025, the Company’s board of directors adopted certain resolutions that amended certain terms of the repurchase program and provided, among other things, that the repurchase program must be executed in such a way that J.Jill’s repurchases pursuant thereto do not directly cause TowerBrook and any investment fund or investment vehicle managed or controlled, directly or indirectly, by TowerBrook, including, without limitation, TI IV JJill Holdings, LP (together with TowerBrook, the “TowerBrook Funds”) to directly or indirectly beneficially own more than 49.9% of the issued and outstanding voting stock of the company; and provided further that J.Jill must take appropriate measures to ensure that repurchases pursuant to the repurchase program do not directly cause the TowerBrook Funds’ ownership of the Company’s outstanding voting stock to exceed 49.9% (the “Board Resolutions”).
Added
On March 7, 2025, the parties entered into a proposed Stipulation and Order Dismissing the Action as Moot and Retaining Jurisdiction to Determine Plaintiff’s Counsel’s Application for an Award of Attorneys’ Fees and Expenses (the “Stipulation and Proposed Order”), pursuant to which the Court would retain jurisdiction regarding any application Plaintiff may make for an award of attorneys’ fees.
Added
The Court entered the Stipulation and Proposed Order the same day, and retained jurisdiction to approve a form of notice concerning attorneys’ fees payable to Plaintiff in connection with the Board Resolutions.
Added
The Company subsequently agreed to pay $450,000 in attorneys’ fees and expenses in full satisfaction of any and all claims by Plaintiff and all of its counsel for fees and expenses in the action.
Added
On March 21, 2025, the Court entered an order closing the action, subject to the Company filing an affidavit with the Court confirming that this notice has been issued. Item 4. Mine Saf ety Disclosures Not applicable. 31 PART II

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeItem 4. Mine Safety Disclosures 29 PART II Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 30 Item 6. [Reserved] 31 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 32 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 42 Item 8.
Biggest changeItem 4. Mine Safety Disclosures 31 PART II Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 32 Item 6. [Reserved] 33 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 34 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 46 Item 8.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeSee “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—General.” 30 Performance Graph The following graph shows a comparison from February 2, 2019 through February 3, 2024, of the cumulative total return for our common stock, the S&P 500 Index and an S&P Retail Index.
Biggest changeSee “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—General.” Subsequent Events On March 11, 2025, the Board declared a cash dividend of $0.08 per share, payable on April 16, 2025 to stockholders of record of issued and outstanding shares of the Company’s common stock as of April 2, 2025. 32 Performance Graph The following graph shows a comparison from February 2, 2019 through February 1, 2025, of the cumulative total return for our common stock, the S&P 500 Index and SPDR S&P Retail Exchange Traded Fund (ETF).
The graph assumes $100 was invested in each of the Company’s common stock, the S&P 500 Index and the S&P Retail Index as of the market close on February 2, 2019. Such returns are based on historical results and are not intended to suggest future performance. Purchases of Equity Securities by the Issuer and Affiliated Purchasers None.
The graph assumes $100 was invested in each of the Company’s common stock, the S&P 500 Index and the S&P Apparel Retail Index as of the market close on February 1, 2020. Such returns are based on historical results and are not intended to suggest future performance.
The following table sets forth the high and low sales prices of our common stock as reported on the NYSE for the Fiscal Years 2023 and 2022 quarters ended, respectively: Fiscal Year 2023 Fiscal Year 2022 High Low High Low First $ 30.36 $ 22.75 $ 17.00 $ 12.47 Second $ 25.00 $ 18.85 $ 20.72 $ 15.14 Third $ 29.91 $ 21.49 $ 20.80 $ 15.45 Fourth $ 32.26 $ 23.06 $ 27.52 $ 20.04 Holders of Record As of February 3, 2024, there were approximately 25 holders of record of our common stock.
The following table sets forth the high and low sales prices of our common stock as reported on the NYSE for the Fiscal Years 2024 and 2023 quarters ended, respectively: Fiscal Year 2024 Fiscal Year 2023 High Low High Low First $ 32.96 $ 23.41 $ 30.36 $ 22.75 Second $ 40.61 $ 27.46 $ 25.00 $ 18.85 Third $ 36.20 $ 23.66 $ 29.91 $ 21.49 Fourth $ 30.40 $ 23.95 $ 32.26 $ 23.06 Holders of Record As of February 1, 2025, there were approximately 22 holders of record of our common stock.
Securities Authorized for Issuance Under Equity Compensation Plans Information regarding our equity compensation plans is set forth in Item 12, Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters.
(b) The amounts do not give effect to any fees, commissions or other costs associated with repurchases of shares. Securities Authorized for Issuance Under Equity Compensation Plans Information regarding our equity compensation plans is set forth in Item 12, Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters.
This number does not include beneficial owners whose shares are held of record by banks, brokers and other financial institutions. Dividends We did not pay any dividends on our common stock during Fiscal Years 2023, 2022 and 2021 and do not have any current plans to pay a cash dividend on our common stock for the foreseeable future.
This number does not include beneficial owners whose shares are held of record by banks, brokers and other financial institutions. Dividends During Fiscal Year 2024, the Board declared a quarterly cash dividend payment of $0.07 per share of common stock (the “Dividend”). During Fiscal Year 2024, the Company paid $2.9 million in dividends.
The payment of cash dividends in the future, if any, will be at the discretion of our board of directors and will depend upon such factors as earnings levels, capital requirements, restrictions imposed by applicable law, our overall financial condition, restrictions in our debt agreements, including in our Credit Agreements, and any other factors deemed relevant by our board of directors.
Our ability to pay dividends in the future is based on a number of factors, such as earnings levels, capital requirements, restrictions imposed by applicable law, our overall financial condition, restrictions in our debt agreements and the ability of our operating subsidiaries to pay dividends to us as a holding company.
Removed
As a holding company, our ability to pay dividends depends on our receipt of cash dividends from our operating subsidiaries, which may further restrict our ability to pay dividends as a result of restrictions on their ability to pay dividends to us under our Credit Facilities and under future indebtedness that we or they may incur.
Added
We did not pay any dividends on our common stock during Fiscal Years 2023 and 2022. The Company intends to pay cash dividends quarterly in the future, subject to market conditions and at the discretion of the Board.
Added
Purchases of Equity Securities by the Issuer and Affiliated Purchasers Period Total Number of Shares Purchased (a) Average Price Paid per Share (b) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Approximate Dollar Value of Shares That May Yet Be Purchased Under the Plans or Programs (b) December 1, 2024 - January 4, 2025 14,057 $ 26.26 14,057 $ 24,631,756 January 5, 2025 - February 1, 2025 5,774 26.79 5,774 24,477,079 19,831 19,831 (a) On December 6, 2024, the Company’s Board of Directors authorized the repurchase of up to $25.0 million of the Company’s Common Stock.
Added
Under the authorization, shares of Common Stock may be purchased from time to time in open market or private transactions, block trades or such other manner as the Company may determine, in accordance with applicable insider trading and other securities laws and regulations of the Exchange Act and share repurchase parameters determined by the Board.
Added
The timing and the number of shares repurchased are subject to the discretion of the Company and may be affected by market conditions and other factors. Total number of shares purchased are determined based on the settlement date of such trades. As of February 1, 2025, the Company had $24.5 million of availability remaining under its stock repurchase authorization.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

67 edited+42 added−13 removed57 unchanged
Biggest changeThe following table summarizes our consolidated results of operations for the periods indicated: For the Fiscal Year Ended Change from Year Ended January 28, 2023 to the Year (in thousands) February 3, 2024 January 28, 2023 Ended February 3, 2024 Dollars % of Net Sales Dollars % of Net Sales $ Change % Change Net sales $ 604,661 100.0 % $ 615,268 100.0 % $ (10,607 ) (1.7 )% Costs of goods sold 177,261 29.3 % 193,218 31.4 % (15,957 ) (8.3 )% Gross profit 427,400 70.7 % 422,050 68.6 % 5,350 1.3 % Selling, general and administrative expenses 341,161 56.4 % 341,903 55.6 % (742 ) (0.2 )% Impairment of long-lived assets 189 0.0 % 1,413 0.2 % (1,224 ) (86.6 )% Operating income 86,050 14.2 % 78,734 12.8 % 7,316 9.3 % Loss on debt refinancing 12,702 2.1 % — 0.0 % 12,702 100.0 % Interest expense, net 22,909 3.8 % 15,946 2.6 % 6,963 43.7 % Interest expense - related party 1,074 0.2 % 4,114 0.7 % (3,040 ) (73.9 )% Income before provision for income taxes 49,365 8.2 % 58,674 9.5 % (9,309 ) (15.9 )% Income tax provision 13,164 2.2 % 16,499 2.7 % (3,335 ) (20.2 )% Net income $ 36,201 6.0 % $ 42,175 6.9 % $ (5,974 ) (14.2 )% Net Sales Net sales for Fiscal Year 2023 decreased $10.6 million or 1.7%, to $604.7 million from $615.3 million for Fiscal Year 2022.
Biggest changeThe following table summarizes our consolidated results of operations for the periods indicated: For the Fiscal Year Ended Change from Year Ended February 3, 2024 to Year Ended February 1, 2025 (in thousands) February 1, 2025 February 3, 2024 Dollars % of Net Sales Dollars % of Net Sales $ Change % Change Net sales $ 610,857 100.0 % $ 608,043 100.0 % $ 2,814 0.5 % Costs of goods sold 181,001 29.6 % 177,261 29.2 % 3,740 2.1 % Gross profit 429,856 70.4 % 430,782 70.8 % (926 ) (0.2 )% Selling, general and administrative expenses 353,382 57.9 % 344,543 56.7 % 8,839 2.6 % Impairment of long-lived assets 772 0.1 % 189 0.0 % 583 308.5 % Operating income 75,702 12.4 % 86,050 14.2 % (10,348 ) (12.0 )% Loss on extinguishment of debt 8,570 1.4 % — 0.0 % 8,570 100.0 % Loss on debt refinancing — 0.0 % 12,702 2.1 % (12,702 ) (100.0 )% Interest expense 15,701 2.6 % 25,699 4.2 % (9,998 ) (38.9 )% Interest expense - related party — 0.0 % 1,074 0.2 % (1,074 ) (100.0 )% Interest income (2,550 ) (0.4 )% (2,790 ) (0.5 )% 240 8.6 % Income before provision for income taxes 53,981 8.8 % 49,365 8.1 % 4,616 9.4 % Income tax provision 14,498 2.4 % 13,164 2.2 % 1,334 10.1 % Net income $ 39,483 6.5 % $ 36,201 6.0 % $ 3,282 9.1 % Net Sales Net sales for Fiscal Year 2024 increased $2.8 million or 0.5%, to $610.9 million from $608.0 million for Fiscal Year 2023.
We may also engage in capital markets transactions from time to time subject to the discretion of our Board. We expect capital expenditures in the next twelve months to support opening of new stores, store design/ remodels, and system upgrades and maintenance projects. 38 Off Balance Sheet Arrangements We are not a party to any off balance sheet arrangements.
We may also engage in capital markets transactions from time to time subject to the discretion of our Board. We expect capital expenditures in the next twelve months to support opening of new stores, store design/ remodels, and system upgrades and maintenance projects. Off Balance Sheet Arrangements We are not a party to any off balance sheet arrangements.
Adjusted EBITDA should not be considered an alternative to, or substitute for, net income (loss), which is calculated in accordance with GAAP. In addition, other companies, including companies in our industry, may calculate Adjusted EBITDA differently or not at all, which reduces the usefulness of Adjusted EBITDA as a tool for comparison.
Adjusted EBITDA should not be considered an alternative to, or substitute for, net income, which is calculated in accordance with GAAP. In addition, other companies, including companies in our industry, may calculate Adjusted EBITDA differently or not at all, which reduces the usefulness of Adjusted EBITDA as a tool for comparison.
We utilize internal channels, including sales catalogs, the internet, and price reductions in retail and outlet stores to liquidate excess inventory. In some cases, external channels such as inventory liquidators are utilized. The prices obtained through these off-price selling methods vary based on many factors.
We utilize internal channels, including sales catalogs, the internet, and price reductions in retail stores to liquidate excess inventory. In some cases, external channels such as inventory liquidators are utilized. The prices obtained through these off-price selling methods vary based on many factors.
The other terms and conditions of the ABL Facility remain substantially unchanged. On December 1, 2023, the Company entered into Amendment No. 7 (the “ABL Amendment”) to the ABL Credit Agreement, by and among the Company, Jill Acquisition LLC, J.Jill Gift Card Solutions, Inc.
The other terms and conditions of the ABL Facility remain substantially unchanged. 39 On December 1, 2023, the Company entered into Amendment No. 7 (the “ABL Amendment”) to the ABL Credit Agreement, by and among the Company, Jill Acquisition LLC, J.Jill Gift Card Solutions, Inc.
During Fiscal Year 2023, we performed a quantitative assessment of our trade name. This analysis contains uncertainties because it 40 requires us to make assumptions and to apply judgments to estimate industry economic factors and the profitability of future business strategies.
During Fiscal Year 2023, we performed a quantitative assessment of our trade name. This analysis contains uncertainties because it requires us to make assumptions and to apply judgments to estimate industry economic factors and the profitability of future business strategies.
On April 5, 2023, the Company and Jill Acquisition LLC (the “Borrower”) entered into a Term Loan Credit Agreement (the “Term Loan Credit Agreement”) by and among the lenders party thereto and Jefferies Finance LLC, as administrative and collateral agent.
Credit Facilities On April 5, 2023, the Company and Jill Acquisition LLC (the “Borrower”) entered into a Term Loan Credit Agreement (the “Term Loan Credit Agreement”) by and among the lenders party thereto and Jefferies Finance LLC, as administrative and collateral agent.
All security interests and liens incurred in connection with the Priming Credit 36 Agreement and Subordinated Credit Agreement have been released. The prepayment of the Priming Credit Agreement and Subordinated Credit Agreement was in accordance with the terms of such agreements.
All security interests and liens incurred in connection with the Priming Credit Agreement and Subordinated Credit Agreement have been released. The prepayment of the Priming Credit Agreement and Subordinated Credit Agreement was in accordance with the terms of such agreements.
The quantitative assessment requires comparing the fair value of a reporting unit to its carrying value, including goodwill. We estimate the fair value of reporting units using the income approach.
The quantitative assessment 43 requires comparing the fair value of a reporting unit to its carrying value, including goodwill. We estimate the fair value of reporting units using the income approach.
We estimate the fair value of an asset group based on the present value of estimated future cash flows, calculated by discounting the cash flow projections used in the previous step. During Fiscal Year 2023, we assessed the carrying values of right-of-use assets and property and equipment as described above.
We estimate the fair value of an asset group based on the present value of estimated future cash flows, calculated by discounting the cash flow projections used in the previous step. During Fiscal Year 2024, we assessed the carrying values of right-of-use assets and property and equipment as described above.
The most significant estimates and assumptions inherent in this approach are the preparation of revenue forecasts, selection of the royalty and discount rates, and selection of the terminal year multiple. We did not record any impairment losses related to the trade name during Fiscal Years 2023, 2022 and 2021.
The most significant estimates and assumptions inherent in this approach are the preparation of revenue forecasts, selection of the royalty and discount rates, and selection of the terminal year multiple. We did not record any impairment losses related to the trade name during Fiscal Years 2024, 2023 and 2022.
If the carrying amount exceeds the reporting unit’s fair value, a goodwill impairment charge is recognized for the amount in excess, not to exceed the total amount of goodwill allocated to that reporting unit. During Fiscal Years 2023, 2022 and 2021 we did not record any impairment to our goodwill.
If the carrying amount exceeds the reporting unit’s fair value, a goodwill impairment charge is recognized for the amount in excess, not to exceed the total amount of goodwill allocated to that reporting unit. During Fiscal Years 2024, 2023 and 2022 we did not record any impairment to our goodwill.
Fiscal Year 2023 is comprised of 53 weeks and Fiscal Years 2022, and 2021 are comprised of 52 weeks. The discussion that follows includes a comparison of our results of operations and liquidity and capital resources for Fiscal Years 2023 and 2022. For the discussion comparing the Fiscal Years 2022 and 2021, refer to Part II, Item 7.
Fiscal Years 2024 and 2022 are comprised of 52 weeks and Fiscal Year 2023 is comprised of 53 weeks. The discussion that follows includes a comparison of our results of operations and liquidity and capital resources for Fiscal Years 2024 and 2023. For the discussion comparing the Fiscal Years 2023 and 2022, refer to Part II, Item 7.
The Term Loan Facility is to be repaid in quarterly payments of $2.2 million from July 28, 2023 to May 2, 2025, and $3.3 million from August 1, 2025 to April 28, 2028 with the balance of the Term Loan Facility due upon maturity on May 8, 2028.
The Term Loan Facility was to be repaid in quarterly payments of $2.2 million from July 28, 2023 to May 2, 2025, and $3.3 million from August 1, 2025 to April 28, 2028 with the balance of the Term Loan Facility due upon maturity on May 8, 2028.
Management believes the estimates and judgments most critical to the preparation of our consolidated financial statements and to the understanding of our reported financial results include those made in connection with revenue recognition, including accounting for outstanding gift cards that will ultimately not be redeemed (“gift card breakage”) and estimated merchandise returns; estimating the value of inventory; and impairment assessments for goodwill and other indefinite-lived intangible assets, and long-lived assets.
Management believes the estimates and judgments most critical to the preparation of our consolidated financial statements and to the understanding of our reported financial results include those made in connection with revenue recognition, including accounting for outstanding gift cards that will ultimately not be redeemed (“gift card breakage”) and estimated merchandise returns; estimating the value of inventory; and impairment assessments for goodwill and other indefinite-lived intangible assets, and long-lived assets; estimating of incurred but not reported (“IBNR”) claims.
Accounting Standards to our audited consolidated financial statements included elsewhere in this Annual Report for information regarding recently issued accounting pronouncements. 41
Accounting Standards to our audited consolidated financial statements included elsewhere in this Annual Report for information regarding recently issued accounting pronouncements. 45
The Company’s fiscal year ends on the Saturday, in January or February, nearest the last day of January, resulting in an additional week of results every five or six years. Fiscal Year 2023 contained 53-weeks of operations whereas 34 the Fiscal Years 2022 and 2021 contained 52-weeks of operations.
The Company’s fiscal year ends on the Saturday, in January or February, nearest to the last day of January, resulting in an additional week of results every five or six years. Fiscal Year 2023 contained 53-weeks of operations whereas the Fiscal Years 2024 and 2022 contained 52-weeks of operations.
We recommend that you review the reconciliation of Adjusted EBITDA to net income (loss), the most directly comparable GAAP financial measure, and the calculation of the resultant Adjusted EBITDA margin below and not rely solely on Adjusted EBITDA or any single financial measure to evaluate our business. 33 Reconciliation of Net Income (Loss) to Adjusted EBITDA and Calculation of Adjusted EBITDA Margin Fiscal Year Ended February 3, 2024 which is comprised of 53-weeks compared to Fiscal Year Ended January 28, 2023 and January 29, 2022 which are comprised of 52-weeks.
We recommend that you review the reconciliation of Adjusted EBITDA to net income, the most directly comparable GAAP financial measure, and the calculation of the resultant Adjusted EBITDA margin below and not rely solely on Adjusted EBITDA or any single financial measure to evaluate our business. 35 Reconciliation of Net Income to Adjusted EBITDA and Calculation of Adjusted EBITDA Margin Fiscal Year Ended February 1, 2025 which is comprised of 52-weeks compared to Fiscal Year Ended February 3, 2024 which is comprised of 53-weeks and January 28, 2023 which is comprised of 52-weeks.
These expenses also include marketing expense, including catalog production and mailing costs, warehousing, distribution and outbound shipping costs, customer service operations, consulting and software services, professional services and other administrative costs. Additionally, our outbound shipping costs may fluctuate due to surcharges from shipping vendors based on demand for shipping services.
These expenses also consist of marketing expense, including catalog production and mailing costs, warehousing, distribution and outbound shipping costs, customer service operations, consulting and software services, natural disaster related costs, professional services and other administrative costs. Additionally, our outbound shipping costs may fluctuate due to surcharges from shipping vendors based on demand for shipping services.
The effective tax rate for Fiscal Year 2022 differs from the federal statutory rate of 21.0% due primarily to the impacts of (i) state and local income taxes, (ii) executive compensation limitations, (iii) valuation allowance changes, and (iv) tax return to provision adjustments.
The effective tax rate for Fiscal Year 2023 differs from the federal statutory rate of 21.0% due primarily to the impacts of (i) state and local income taxes, (ii) executive compensation limitations, and (iii) valuation allowance changes.
These costs fluctuate based on certain factors beyond our control, including labor conditions, inbound transportation or freight costs, energy prices, currency fluctuations and commodity prices. We place orders with merchandise suppliers in U.S. dollars and, as a result, are not exposed to significant foreign currency exchange risk. Selling, general and administrative expenses include all operating costs not included in COGS.
These costs fluctuate based on certain factors beyond our control, including labor conditions, inbound transportation or freight costs, energy prices, currency fluctuations and commodity prices. We place orders with merchandise suppliers in U.S. dollars and, as a result, are not exposed to significant foreign currency exchange risk.
The effective tax rate during Fiscal Year 2023 differs from the federal statutory rate of 21.0% due primarily to the impacts of (i) state and local income taxes, (ii) executive compensation limitations, and (iii) valuation allowance changes. Refer to Note 13 . Income Taxes to the consolidated financial statements for additional income tax information.
The effective tax rate during Fiscal Year 2024 differs from the federal statutory rate of 21.0% due primarily to the impacts of (i) state and local income taxes and (ii) executive compensation limitations. Refer to Note 14 . Income Taxes to the consolidated financial statements for additional income tax information.
Key elements of cash provided by operating activities were (i) net income of $36.2 million, (ii) adjustments to reconcile net income to net cash provided by operating activities of $43.1 million, primarily driven by $22.9 million of depreciation and amortization and the loss on debt refinancing of $12.7 million, and (iii) the use of cash from net operating assets and liabilities of $16.0 million, primarily driven by accrued expenses and other current liabilities and operating lease assets and liabilities.
Key elements of cash provided by operating activities were (i) net income of $36.2 million, (ii) adjustments to reconcile net income to net cash provided by operating activities of $43.1 million, primarily driven by $22.9 million of depreciation and amortization, and the loss of debt refinancing of $12.7 million, and (iii) the use of cash from net operating assets and liabilities of $16.0 million, primarily driven by accounts payable and operating lease assets and liabilities, partially offset by changes in merchandise inventory and prepaid expenses and other current assets.
References in this Annual Report to “Fiscal Year 2023” refer to the fiscal year ended February 3, 2024, references to the “Fiscal Year 2022” refer to the fiscal year ended January 28, 2023 and references to “Fiscal Year 2021” refer to the fiscal year ended January 29, 2022.
References in this Annual Report to “Fiscal Year 2024” refer to the fiscal year ended February 1, 2025, references to the “Fiscal Year 2023” refer to the fiscal year ended February 3, 2024 and references to “Fiscal Year 2022” refer to the fiscal year ended January 28, 2023.
The Company had outstanding letters of credit in the amount of $5.8 million and had a maximum additional borrowing capacity of $34.2 million as of February 3, 2024. Future Cash Requirements We enter into contractual obligations in the ordinary course of business that may require future cash payments.
The Company had outstanding letters of credit in the amount of $4.3 million and had a maximum additional borrowing capacity of $35.7 million as of February 1, 2025. Future Cash Requirements We enter into contractual obligations in the ordinary course of business that may require future cash payments.
How We Assess the Performance of Our Business In assessing the performance of our business, we consider a variety of financial and operating metrics, including accounting principles generally accepted in the United States of America (“GAAP”) and non-GAAP measures, such as: Net sales consist primarily of revenues, net of merchandise returns and discounts, generated from the sale of apparel and accessory merchandise through our Retail and Direct channels.
How We Assess the Performance of Our Business In assessing the performance of our business, we consider a variety of financial and operating metrics, including financial measures calculated in accordance with U.S. generally accepted accounting principles (“GAAP”) and non-GAAP measures, such as: Net sales consist primarily of revenues, net of merchandise returns and discounts, generated from the sale of apparel and accessory merchandise through our retail stores ( “ Retail ” ) and through our website and catalog orders ( “ Direct ” ).
The timing and level of markdowns are driven by customer acceptance of our merchandise. The Company’s COGS, and consequently gross profit, may not be comparable to those of other retailers, as inclusion of certain costs vary across the industry. The variability in COGS is due to raw materials, transportation and freight costs.
The Company’s COGS, and consequently gross profit, may not be comparable to those of other retailers, as inclusion of certain costs vary across the industry. The variability in COGS is due to raw materials, transportation and freight costs.
Cash Flow Analysis The following table shows our cash flows information for the periods presented: For the Fiscal Year Ended (in thousands) February 3, 2024 January 28, 2023 January 29, 2022 Net cash provided by operating activities $ 63,313 $ 74,425 $ 74,999 Net cash used in investing activities (16,934 ) (15,067 ) (5,474 ) Net cash used in financing activities (71,260 ) (8,262 ) (37,975 ) Net Cash provided by Operating Activities Net cash provided by operating activities during Fiscal Year 2023 decreased $11.1 million compared to Fiscal Year 2022.
Cash Flow Analysis The following table shows our cash flows information for the periods presented: For the Fiscal Year Ended (in thousands) February 1, 2025 February 3, 2024 January 28, 2023 Net cash provided by operating activities $ 65,036 $ 63,313 $ 74,425 Net cash used in investing activities (17,755 ) (16,934 ) (15,067 ) Net cash used in financing activities (74,026 ) (71,260 ) (8,262 ) Net Cash provided by Operating Activities Net cash provided by operating activities during Fiscal Year 2024 increased $1.7 million compared to Fiscal Year 2023.
Each of the Term Loan Credit Agreement and the ABL Credit Agreement also has certain financial covenants (see Note 9. Debt to the audited consolidated financial statements included in this Annual Report). As of February 3, 2024, the Company is in compliance with all such covenants.
Each of the Term Loan Credit Agreement and the ABL Credit Agreement also has certain financial covenants (see Note 9. Debt to the audited consolidated financial statements included in this Annual Report).
Management evaluates its policies and assumptions on an ongoing basis. Our significant accounting policies related to these accounts in the preparation of our consolidated financial statements are described below (see Note 2. Summary of Significant Accounting Policies to our audited consolidated financial statements presented elsewhere in this Annual Report for additional information regarding our critical accounting policies).
Management evaluates its policies and assumptions on an ongoing basis. Our significant accounting policies related to these accounts in the preparation of our consolidated financial statements are described below (see Note 2.
We have not made significant changes to our assumptions during the periods presented in our consolidated financial statements included elsewhere in this Annual Report, and estimates have not varied significantly from historically recorded amounts. 39 Asset Impairment Assessments Goodwill We evaluate goodwill for impairment on an annual basis on the last day of our eleventh fiscal month beginning Fiscal Year 2023 and at the end of each fiscal year prior to Fiscal 2023, or more frequently between annual tests when events or changes in circumstances indicate that the carrying value may not be recoverable.
Asset Impairment Assessments Goodwill We evaluate goodwill for impairment on an annual basis on the last day of our eleventh fiscal month beginning Fiscal Year 2023 and at the end of each fiscal year prior to Fiscal 2023, or more frequently between annual tests when events or changes in circumstances indicate that the carrying value may not be recoverable.
We believe our assumptions are reasonable based on available information. Changes in assumptions and estimates used in the impairment analysis, or future results that vary from assumptions used in the analysis, could affect the estimated fair value of long-lived intangible assets and could result in impairment charges in a future period. Recent Accounting Pronouncements See Note 3.
Changes in assumptions and estimates used in the impairment analysis, or future results that vary from assumptions used in the analysis, could affect the estimated fair value of long-lived intangible assets and could result in impairment charges in a future period.
These expenses include all payroll and related expenses, occupancy costs, information systems costs and other operating expenses related to our stores and to our operations at our headquarters, including utilities, depreciation and amortization.
Selling, general and administrative (“SG&A”) expenses include all operating costs not included in COGS. These expenses consist primarily of all payroll and related expenses, occupancy costs, information systems costs and other operating expenses related to our stores and to our operations at our headquarters, including utilities, depreciation and amortization.
(b) Represents expenses associated with equity incentive instruments granted to our management and board of directors. Incentive instruments are accounted for as equity-classified awards with the related compensation expense recognized based on fair value at the date of the grant. (c) Represents the net gain or loss on the disposal of fixed assets.
Incentive instruments are accounted for as equity-classified awards with the related compensation expense recognized based on fair value at the date of the grant. (b) Represents the net gain or loss on the disposal of fixed assets. (c) Represents amortization of capitalized implementation costs related to cloud-based software arrangements that are included within Selling, general and administrative expenses.
Net cash provided by operating activities during Fiscal Year 2022 was $74.4 million.
Net cash provided by operating activities during Fiscal Year 2024 was $65.0 million.
As of February 3, 2024, we had $62.2 million in cash and cash equivalents and $34.2 million of total availability under our $40.0 million ABL Facility.
As of February 1, 2025, we had $35.4 million in cash and cash equivalents and $35.7 million of total availability under our $40.0 million ABL Facility.
During Fiscal Year 2021, we did not record any impairments related to right-of-use assets and leasehold improvements. Determining the fair value of long-lived assets requires management judgment and relies upon the use of significant estimates and assumptions, including future sales, our margins and cash flows, current and future market conditions, discount rates applied, useful lives and other factors.
Determining the fair value of long-lived assets requires management judgment and relies upon the use of significant estimates and assumptions, including future sales, our margins and cash flows, current and future market conditions, discount rates applied, useful lives and other factors. We believe our assumptions are reasonable based on available information.
Our Fiscal Year 2023 results include $0.2 million of impairment charges for long-lived assets (leasehold improvements and furniture, fixtures and equipment), and our Fiscal Year 2022 results include $1.4 million of impairment charges for long-lived assets (operating lease right-of-use asset, leasehold improvements and furniture, fixtures and equipment). Fair value adjustments .
Our Fiscal Year 2024 results include $0.5 million of impairment charges for long-lived assets (leasehold improvements, and furniture, fixtures and equipment), and our Fiscal Year 2023 results include $0.2 million of impairment charges for long-lived assets (leasehold improvements and furniture, fixtures and equipment).
Sales Return Reserve The Company has a return policy where merchandise returns will be accepted within 90 days of the original purchase date. At the time of sale, the Company records an estimated sales reserve for merchandise returns based on historical prior returns experience and expected future returns.
At the time of sale, the Company records an estimated sales reserve for merchandise returns based on historical prior returns experience and expected future returns.
The decrease in net sales was due to total company comparable sales decrease of 1.4%. Our Direct channel was responsible for 46.5% of our net sales in Fiscal Year 2023 compared to 46.8% in Fiscal Year 2022. Our Retail channel was responsible for 53.5% of our net sales in Fiscal Year 2023 and 53.2% in Fiscal Year 2022.
The increase in net sales was due to total company comparable sales increase of 1.5% partially offset by the loss of the 53 rd week included in Fiscal Year 2023. Our Direct channel was responsible for 47.5% of our net sales in Fiscal Year 2024 compared to 46.8% in Fiscal Year 2023.
Adjusted EBITDA, represents net income (loss) plus net interest expense, provision (benefit) for income taxes, depreciation and amortization, equity-based compensation expense, goodwill and indefinite-lived intangible assets impairment, write-off of property and equipment, loss on debt refinancing, adjustment for exited retail stores, fair value adjustments, and other non-recurring expenses, primarily consisting of outside legal and professional fees associated with certain non-recurring transactions and events.
Adjusted EBITDA, represents net income plus depreciation and amortization, income tax provision, interest expense, interest expense - related party, interest income, equity-based compensation expense, write-off of property and equipment, amortization of cloud-based software implementation costs, loss on extinguishment of debt, loss on debt refinancing, adjustment for exited retail stores, impairment of long-lived assets, loss due to hurricane, and other non-recurring items, primarily consisting of non-ordinary course professional fees, non-employee share-based payments, and legal settlements and fees associated with certain non-recurring transactions and events.
Costs of goods sold (“COGS”) includes the direct costs of sold merchandise, inventory shrinkage, and adjustments and reserves for excess, aged and obsolete inventory. We review our inventory levels on an ongoing basis to identify slow-moving merchandise and use markdowns to liquidate these products. Changes in the assortment of our products may also impact our gross profit.
We review our inventory levels on an ongoing basis to identify slow-moving merchandise and use markdowns to liquidate these products. Changes in the assortment of our products may also impact our gross profit. The timing and level of markdowns are driven by customer acceptance of our merchandise.
The increase was driven by higher interest rates. Income Tax Provision The income tax provision for Fiscal Year 2023 was $13.2 million compared to $16.5 million for Fiscal Year 2022. Our effective tax rates were 26.7% and 28.1%, respectively.
Interest Income For Fiscal Year 2024, the Company earned interest on cash of $2.6 million, compared to $2.8 million for Fiscal Year 2023. Income Tax Provision The income tax provision for Fiscal Year 2024 was $14.5 million compared to $13.2 million for Fiscal Year 2023. Our effective tax rates were 26.9% and 26.7%, respectively.
The following table provides a reconciliation of net income (loss) to Adjusted EBITDA and the calculation of Adjusted EBITDA margin for the periods presented: For the Fiscal Year Ended (in thousands) February 3, 2024 January 28, 2023 January 29, 2022 Statements of Operations Data: Net income (loss) $ 36,201 $ 42,175 $ (28,143 ) Add back: Depreciation and amortization 22,931 25,761 29,258 Income tax provision 13,164 16,499 8,018 Interest expense, net 22,909 15,946 17,057 Interest expense - related party 1,074 4,114 2,029 Adjustments: Fair value adjustment of derivative — — 2,775 Fair value adjustment of warrants - related party (a) — — 56,984 Equity-based compensation expense (b) 3,762 3,505 2,610 Write-off of property and equipment (c) 70 267 940 Loss on debt refinancing (d) 12,702 — — Adjustment for exited retail stores (e) (767 ) (250 ) (1,755 ) Impairment of long-lived assets (f) 189 1,413 — Other non-recurring items (g) 2 7 2,013 Adjusted EBITDA $ 112,237 $ 109,437 $ 91,786 Net sales $ 604,661 $ 615,268 $ 585,206 Adjusted EBITDA margin 18.6 % 17.8 % 15.7 % (a) The fair value adjustment of warrants increased due to the increase in J.Jill’s stock price.
The following table provides a reconciliation of net income to Adjusted EBITDA and the calculation of Adjusted EBITDA margin for the periods presented: For the Fiscal Year Ended (in thousands) February 1, 2025 February 3, 2024 January 28, 2023 Statements of Operations Data: Net income $ 39,483 $ 36,201 $ 42,175 Add (Less): Depreciation and amortization 21,337 22,931 25,761 Income tax provision 14,498 13,164 16,499 Interest expense 15,701 25,699 17,174 Interest expense - related party — 1,074 4,114 Interest income (2,550 ) (2,790 ) (1,228 ) Adjustments: Equity-based compensation expense (a) 6,510 3,762 3,505 Write-off of property and equipment (b) 105 70 267 Amortization of cloud-based software implementation costs (c) 882 620 — Loss on extinguishment of debt (d) 8,570 — — Loss on debt refinancing (e) — 12,702 — Adjustment for exited retail stores (f) (843 ) (767 ) (250 ) Impairment of long-lived assets (g) 772 189 1,413 Loss due to hurricane (h) 2 — — Other non-recurring items (i) 2,673 2 7 Adjusted EBITDA $ 107,140 $ 112,857 $ 109,437 Net sales $ 610,857 $ 608,043 $ 618,528 Adjusted EBITDA margin 17.5 % 18.6 % 17.7 % (a) Represents expenses associated with equity incentive instruments granted to our management and board of directors (the “Board”).
Number of stores reflects all stores open at the end of a reporting period. In connection with opening new stores, we incur pre-opening costs.
As a result, the reporting of our total company comparable sales may not be comparable to sales data made available by other companies. Number of stores reflects all stores open at the end of a reporting period. In connection with opening new stores, we incur pre-opening costs.
Certain of our competitors and other retailers may calculate total company comparable sales differently than we do. Our comparable sales are based on a 52-week period. As a result, the reporting of our total company comparable sales may not be comparable to sales data made available by other companies.
Certain of our competitors and other retailers may calculate total company comparable sales differently than we do. Our comparable sales are based on a 52-week period. The total company comparable sales calculation shifts the weeks in the fiscal year containing the fifty-third week to align like-for-like.
In connection with closing stores, we incur store-closing costs. Store-closing costs primarily consist of lease termination penalties and costs of transporting inventory and fixtures to other store locations.
In 34 connection with closing stores, we incur store-closing costs. Store-closing costs primarily consist of lease termination penalties and costs of transporting inventory and fixtures to other store locations. These pre-opening and store-closing costs are included in selling, general and administrative expenses and are generally incurred and expensed within 30 days of opening a new store or closing a store.
The brand represents an easy, thoughtful and inspired style that celebrates the totality of all women and designs its products with its core brand ethos in mind: keep it simple and make it matter. J.Jill offers a high touch customer experience through over 200 stores nationwide and a robust ecommerce platform. J.Jill is headquartered outside Boston.
Overview J.Jill is a national lifestyle brand that provides apparel, footwear and accessories designed to help its customers move through a full life with ease. The brand represents an easy, thoughtful and inspired style that celebrates the totality of all women and designs its products with its core brand ethos in mind: keep it simple and make it matter.
Net Cash used in Financing Activities Net cash used in financing activities during Fiscal Year 2023 increased as compared to the prior year. The change was primarily driven by the repayment of the previously existing Priming and Subordinated Credit Agreements offset by the proceeds from issuance of the Term Loan.
The change was primarily driven by the proceeds from issuance of the Term Loan in the prior year offset by the principal repayments on the Priming Term Loan and Subordinated Term Loan as compared to the principal repayments on the Term Loan in the current year, partially offset by the proceeds from the issuance of common stock.
During Fiscal Year 2023, the Company recorded impairment charges of $0.2 million.
During Fiscal Year 2023, the Company recorded impairment charges of $0.2 million related to leasehold improvements at certain store locations driven by the actual performance at these locations.
(d) Represents loss on the repayment of Priming Term Loan Credit Agreement (the “Priming Credit Agreement”) and the Subordinated Term Loan Credit Agreement (the “Subordinated Credit Agreement”) (e) Represents non-cash gains associated with exiting store leases earlier than anticipated. (f) Represents impairment of long-lived assets related primarily to right-of-use assets and leasehold improvements.
(f) Represents non-cash gains associated with exiting store leases earlier than anticipated. (g) Represents impairment of long-lived assets related to right-of-use assets and leasehold improvements. (h) Represents loss on write-off of property and equipment and inventory at one store location due to hurricane and insurance recovery received to date.
Net Cash used in Investing Activities Net cash used in investing activities during Fiscal Year 2023 was $16.9 million, an increase of $1.9 million as compared to Fiscal Year 2022, representing increased purchases of property, equipment, software and technology-related investments, primarily relating to the new point of sale system.
Net Cash used in Investing Activities Net cash used in investing activities during Fiscal Year 2024 was $17.8 million, an increase of $0.8 million as compared to Fiscal Year 2023, representing investments in stores, offset by a decrease in software and technology-related investments, and capital projects at the Company’s distribution center.
Dividends The payment of cash dividends in the future, if any, will be at the discretion of our board of directors and will depend upon such factors as earnings levels, capital requirements, restrictions imposed by applicable law, our overall financial condition, restrictions in our debt agreements and any other factors deemed relevant by our board of directors.
Our ability to pay dividends in the future is based on a number of factors, such as earnings levels, capital requirements, restrictions imposed by applicable law, our overall financial condition, restrictions in our debt agreements and the ability of our operating subsidiaries to pay dividends to us as a holding company.
Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Fiscal Year 2022 Form 10-K, which was filed with the United States Securities and Exchange Commission on March 30, 2023. Overview J.Jill is a national lifestyle brand that provides apparel, footwear and accessories designed to help its customers move through a full life with ease.
Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Fiscal Year 2023 Form 10-K, which was filed with the United States Securities and Exchange Commission on April 4, 2024. All references in this Annual Report to "J.Jill", "we", "our", "us", "the Company" or similar terms are to J.Jill, Inc. and its subsidiaries.
These pre-opening and store-closing costs are included in selling, general and administrative expenses and are generally incurred and expensed within 30 days of opening a new store or closing a store. 32 Gross profit is equal to our net sales less costs of goods sold. Gross profit as a percentage of our net sales is referred to as gross margin.
Gross profit is equal to our net sales less costs of goods sold. Gross profit as a percentage of our net sales is referred to as gross margin.
Key elements of cash provided by operating activities were (i) net income of $42.2 million, (ii) adjustments to reconcile net income to net cash provided by operating activities of $35.4 million, primarily driven by $25.8 million of depreciation and amortization, and (iii) the use of 37 cash from net operating assets and liabilities of $3.1 million, primarily driven by accounts payable and operating lease assets and liabilities, partially offset by changes in merchandise inventory and prepaid expenses and other current assets.
Key elements of cash provided by operating activities were (i) net income of $39.5 million, (ii) adjustments to reconcile net income to net cash provided by operating activities of $36.4 million, primarily driven by $21.3 million of depreciation and amortization and the loss on extinguishment of debt $8.6 million, and Equity-based compensation $6.5 million, and (iii) uses of cash of $10.8 million for net operating assets and liabilities.
Net cash used in financing activities during Fiscal Year 2022 was $8.3 million, which was driven by the $5.0 million repayment of the Existing Term Loan and $2.1 million principal payment on the Priming Facility.
Net cash used in financing activities during Fiscal Year 2024 was $74.0 million, which was driven by principal repayments and prepayment premium on the Term Loan and dividends paid to common shareholders, partially offset by proceeds from the issuance of common stock, net of underwriting costs.
The gross margin for Fiscal Year 2023 was 70.7% compared to 68.6% for Fiscal Year 2022, largely driven by favorable freight costs and strong full price sales. Selling, General and Administrative Expenses Selling, general and administrative expenses for Fiscal Year 2023 decreased $0.7 million, or 0.2%, to $341.2 million from $341.9 million for Fiscal Year 2022.
Gross Profit and Cost of Goods Sold Gross profit for Fiscal Year 2024 decreased $0.9 million, or 0.2%, to $429.9 million from $430.8 million for Fiscal Year 2023. The gross margin for Fiscal Year 2024 was 70.4% compared to 70.8% for Fiscal Year 2023, driven by an increase in promotional activities and increased freight costs.
Accordingly, estimates of future sales prices require management judgment based on historical experience, assessment of current conditions and assumptions about future transactions.
Accordingly, estimates of future sales prices require management judgment based on historical experience, assessment of current conditions and assumptions about future transactions. We have not made significant changes to our assumptions during the periods presented in our consolidated financial statements included elsewhere in this Annual Report, and estimates have not varied significantly from historically recorded amounts.
Our Fiscal Year 2023 results include $0.2 million of impairment charges for long-lived assets (leasehold improvements and furniture, fixtures and equipment), and our Fiscal Year 2022 results include $1.4 million of impairment charges for long-lived assets (operating lease right-of-use asset, leasehold improvements and furniture, fixtures and equipment). 35 Loss on debt refinancing For Fiscal Year 2023, the Company recognized a loss on debt refinancing of $12.7 million related to entering into a Term Loan Credit Agreement and the repayment of the Priming Credit Agreement and the Subordinated Credit Agreement, as discussed in the Liquidity and Capital Resources section below.
No such loss was incurred by the Company during Fiscal Year 2023. Loss on debt refinancing. For Fiscal Year 2023, the Company recognized a loss on debt refinancing of $12.7 million related to entering into a Term Loan Credit Agreement and the repayment of the Priming Credit Agreement and the Subordinated Credit Agreement.
These net cash outflows were partially offset by higher accounts payable of $12.4 million and lower accounts receivable of $3.2 million due to the timing of payments. Net cash provided by operating activities during Fiscal Year 2023 was $63.3 million.
Net cash provided by operating activities during Fiscal Year 2023 was $63.3 million.
Capitalization At February 3, 2024, long-term debt consisted of the following: Carrying Value of Debt February 3, 2024 Term Loan Facility (principal of $168,438) 155,948 Less: Current portion (including ECF payment) (35,353 ) Net long-term debt $ 120,595 The Company had no short-term borrowings under the Company’s ABL Facility as of February 3, 2024.
The Share Repurchase Program does not obligate the Company to acquire any particular amount of common stock and may be modified, suspended or terminated at any time. 41 Capitalization The Company’s long-term debt consisted of the following: Carrying Value of Debt February 1, 2025 Term Loan Facility (principal of $74,288) $ 69,419 Less: Current portion — Net long-term debt $ 69,419 The Company had no short-term borrowings under the Company’s ABL Facility as of February 1, 2025.
The 53rd week added approximately $7.9 million to net sales and $2.2 million to Adjusted EBITDA for Fiscal Year 2023. Results of Operations Fiscal Year Ended February 3, 2024 which is comprised of 53-weeks compared to Fiscal Year Ended January 28, 2023 which is comprised of 52-weeks.
No such loss was incurred by the Company during Fiscal Year 2024. Results of Operations Fiscal Year Ended February 1, 2025 which is comprised of 52-weeks compared to Fiscal Year Ended February 3, 2024 which is comprised of 53-weeks.
We operated 244 and 243 retail stores at the end of these same periods, respectively. Gross Profit and Cost of Goods Sold Gross profit for Fiscal Year 2023 increased $5.4 million, or 1.3%, to $427.4 million from $422.1 million for Fiscal Year 2022.
Our Retail channel was responsible for 52.5% of our net sales in Fiscal Year 2024 and 53.2% in Fiscal Year 2023. We operated 252 and 244 retail stores at the end of these same periods, respectively.
The Company paid $19.7 million in cash for income taxes during Fiscal Year 2022 and received tax refunds of approximately $10.3 million relating to prior years. Liquidity and Capital Resources General Our primary sources of liquidity and capital resources are cash and cash equivalents generated from operating activities and availability under our asset-based revolving credit facility agreement (the “ABL Facility”).
Liquidity and Capital Resources General Our primary sources of liquidity and capital resources are cash and cash equivalents generated from operating activities and availability under our ABL Facility, so long as certain conditions related to the maturity of the Term Loan Credit Agreement are met.
Impairment of long-lived assets Impairment of long-lived assets for Fiscal Year 2023 decreased by $1.2 million, or 86.6% to $0.2 million from $1.4 million for Fiscal Year 2022.
The increase was partially offset by a decrease of $1.6 million in depreciation and amortization, $1.0 million in occupancy, and an increase of $0.5 million in capitalized payroll related to the order management system implementation. 37 Impairment of long-lived assets Impairment of long-lived assets for Fiscal Year 2024 increased by $0.6 million, or 308.5% to $0.8 million from $0.2 million for Fiscal Year 2023.
As of February 3, 2024 the Company expects to make an ECF payment of $26.6 million (amounting to 50% of the annual ECF) for Fiscal Year 2023, in accordance with the provisions of the Term Loan Credit Agreement.
Debt to the consolidated financial statements included in this Annual Report for additional information. For Fiscal Year 2024, the Company would be required to make an ECF payment of $11.8 million prior to May 7, 2025 under the terms of the Term Loan Credit Agreement.
Removed
Our historical revenue growth has been accompanied by increased selling, general and administrative expenses. The most significant increases were in marketing and payroll investments. Adjusted earnings before interest, taxes, depreciation and amortization (“Adjusted EBITDA”) and Adjusted EBITDA Margin .
Added
J.Jill offers a high touch customer experience through over 250 stores nationwide and a robust ecommerce platform. J.Jill is headquartered outside Boston.
Removed
(g) Represents items management believes are not indicative of ongoing operating performance. In Fiscal Year 2023 and Fiscal Year 2022, these expenses are primarily composed of legal and advisory costs. Fiscal Years 2021 expenses are primarily composed of incremental one-time costs related to COVID-19. Items Affecting the Comparability of our Results of Operations Impairment losses.
Added
Costs of goods sold (“COGS”) consists of the direct costs of sold merchandise, which include customs, taxes, duties, commissions and inbound shipping costs, inventory shrinkage, and adjustments and reserves for excess, aged and obsolete inventory. COGS does not include distribution center costs and allocations of indirect costs, such as occupancy, depreciation, amortization, or labor and benefits.
Removed
Fair value adjustments consist of the mark-to-market of warrants and derivative liabilities related to the debt restructuring consummated on September 30, 2020. These fair value adjustments were due to the increase in J.Jill’s stock price from January 30, 2021 through May 31, 2021.
Added
With the exception of store selling expenses, certain marketing expenses and incentive compensation, SG&A expenses generally do not vary proportionately with net sales. As a result, SG&A expenses as a percentage of net sales are usually higher in lower-volume periods and lower in higher-volume periods. Adjusted earnings before interest, taxes, depreciation and amortization (“Adjusted EBITDA”) and Adjusted EBITDA Margin .
Removed
Effective May 31, 2021, these liabilities were reclassified to equity because from that date they can only be settled by exercise of the warrants into common stock. Our Fiscal Year 2021 results include fair value adjustments totaling $59.8 million. See Note 14.
Added
Adjusted EBITDA for fiscal year ended February 3, 2024 has been restated to include such adjustments to Net income, and no adjustment was made for fiscal year ended January 28, 2023 as the amount was immaterial.
Removed
Net Income (Loss) Per Share , in the notes to the financial statements included elsewhere in this Annual Report, for additional information on these fair value adjustments. COVID-19 impact. Our Fiscal Year 2021 financial results were significantly impacted by COVID-19.
Added
(d) Represents loss on the prepayment of a portion of the term loan (the “Term Loan Credit Agreement” and, such facility, the “Term Loan Facility”). (e) Represents loss on the repayment of Priming Term Loan Credit Agreement (the “Priming Credit Agreement”) and the Subordinated Term Loan Credit Agreement (the “Subordinated Credit Agreement”).
Removed
Although the Company lost revenues, we continued to incur certain expenses, such as payroll and rent; therefore, ratios and other items may not be comparable to our Fiscal Year 2023 and Fiscal Year 2022 financial results. 53rd week .
Added
(i) Represents items management believes are not indicative of ongoing operating performance, including non-ordinary course professional fees, non-employee share-based payments, and legal settlements and fees. Items Affecting the Comparability of our Results of Operations 53rd week .
Removed
The decrease is driven by a $2.8 million decrease in depreciation and amortization, and a $1.1 million decrease in shipping expenses. The decrease was partially offset by a $1.6 million increase in software application hosting and maintenance expenses and a $1.6 million increase in compensation expenses.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeBased on the schedule of outstanding borrowings as of February 3, 2024, a 10% change in our current interest rate would have affected net income by $10.5 million during Fiscal Year 2023.
Biggest changeBased on the schedule of outstanding borrowings as of February 1, 2025, a 10% change in our current interest rate would have affected net income by $5.8 million during Fiscal Year 2024.
As of February 3, 2024, there was an outstanding balance of $168.4 million under the Term Loan Facility. There were no outstanding borrowings under the ABL Facility. We currently do not engage in any interest rate hedging activity.
As of February 1, 2025, there was an outstanding balance of $74.3 million under the Term Loan Facility. There were no outstanding borrowings under the ABL Facility. We currently do not engage in any interest rate hedging activity.

Other JILL 10-K year-over-year comparisons