Tailored Brands to temporarily close fulfillment centers, reduce cash outlays
Tailored Brands is shutting its e-commerce fulfillment centers and limiting or deferring all discretionary spending in response to the coronavirus pandemic.
The menswear giant, whose brands include Men's Wearhouse, Jos. A. Bank, said it is taking “aggressive and prudent actions to ensure the business has ample liquidity to weather this uncertain period.” As a “proactive measure” and with an “abundance of caution,” on March 16, it drew down $260 million from its revolving credit facility.
On an earnings call with investors, Tailored Brand executives said the company is significantly reducing inventory buy plans, capital expenditures, advertising spend and store and headquarters overhead costs.
“These actions will meaningfully reduce cash outlays,” said Jack Calandra, executive VP, CFO and treasurer, Tailored Brands. “We also have contingency plans for deeper cuts if our stores are closed beyond March 28. “We believe the aggressive actions we've taken and the contingency plans we've developed will allow us to weather this period of uncertainty.”
Tailored Brands will close its e-commerce fulfillment centers from March 20 through at least March 28 out of concern over the COVID-19 pandemic. The company is also suspending the already limited operations in its stores in the U.S. and Canada until March 28. Store employees will be paid for scheduled hours during this time period.
“We will continue to monitor this timing based on guidance from health authorities,” said Tailored Brands president and CEO Dinesh Lathi.
Tailored Brands said that items can still be ordered online, but the items will be shipped after the distribution center reopens.
The retailer noted that it will work with customers as their plans evolve.
“If an event is postponed for any reason, we will maintain order details and measurements, so the order can be reactivated with a simple phone call whenever the event is rescheduled,” the company stated. “If an event is cancelled, customers can choose a gift card and an additional 20% discount for future use, or a full refund.”
Tailored Brands operates the Men's Wearhouse, Jos. A. Bank, Moores Clothing for Men and K&G brands.