Owner of Men’s Wearhouse files for bankruptcy
Tailored Brands, whose store banners include Men’s Wearhouse and Jos.A. Bank, has filed for Chapter 11 bankruptcy protection.
The move was not unexpected. In July, Tailored Brands said it expected to close up to 500 stores “over time” and reduce its corporate workforce as a result of business disruptions from the COVID-19 pandemic. It also appointed a chief restructuring officer to help get its business back on track.
The pandemic has hit apparel retailers particularly hard as demand for work clothes plunged amid stay-at-home orders. In July, Brooks Brothers filed for bankruptcy. Similar to other retailers that have filed for Chapter 11 in recent months, Tailored Brands was struggling pre-pandemic amid increased competition from online brands.
In a release announcing its bankruptcy filing, Tailored Brands said that it has entered into a restructuring agreement with more than 75% of its senior lenders that is expected to reduce the company’s funded debt by at least $630 million and provide increased financial flexibility. The company said it has received commitments for $500 million in debtor-in-possession financing from its existing lenders.
Tailored Brands said it would continue to operate its four retail brands — Men’s Wearhouse, Jos A. Bank, Moores Clothing for Men and K&G Fashion — throughout the restructuring process. It has approximately 1,400 stores and 18,000 employees.
“As evidenced by the positive results we saw in January and February, we have made significant progress in refining our assortments, strengthening our omnichannel offering and evolving our marketing channel and creative mix,” said Tailored Brands president and CEO Dinesh Lathi. “However, the unprecedented impact of COVID-19 requires us to further adapt and evolve. Reaching an agreement with our lenders represents a critical milestone toward our goal of becoming a stronger company that has the financial and operational flexibility to compete and win in the rapidly evolving retail environment.”
Tailored Brands said implementing the financial restructuring would allow it “to continue its store optimization process to focus on and invest in the appropriate areas to position the business for the future.”