Brooks Brothers Group Inc filed for bankruptcy, felled by the pandemic’s impact on clothing sales and its own heavy debt load.
The famed apparel company is the latest to succumb as a nationwide lockdown during the coronavirus disease (Covid-19) outbreak added to the woes afflicting old-line retailers. Neiman Marcus Group Inc, J Crew Group Inc and John Varvatos Enterprises Inc each filed for bankruptcy since the virus took hold.
The company that says it’s put 40 US presidents in its suits, survived two World Wars and navigated through casual Fridays and a loosening of dress standards even on Wall Street, but the Covid-19 pandemic pushed the 200-year-old company into seek Chapter 11 protection.
The Chapter 11 bankruptcy filing in Delaware allows Brooks Brothers to keep operating while it works out a plan to turn the business around and pay its debts. The company listed assets and liabilities of at least $500 million each in court papers, and a spokesperson said via email it had lined up a $75 million bankruptcy loan.
The pandemic has hit Brooks Brothers hard, shuttering office buildings and hurting demand for business wear as people worked from home. The retailer has been trying to sell itself since last year as many of its roughly 250 US locations struggled with declining sales, Bloomberg reported earlier.
It’s continuing to seek a buyer, according to the spokesperson.
With its first store in 1818 on the corner of Cherry and Catherine streets in lower Manhattan, the company’s simple, classic suits became a staple on Wall Street. Brooks Brothers, which calls itself the oldest US clothing retailer, has dressed US presidents, including Abraham Lincoln, and now sells men’s, women’s and children’s clothing.
The store began its international expansion with a Tokyo flagship in 1979 and now has more than 250 locations outside the US. Its many stores have become a burden amid changing consumer habits and a shift toward more casual work attire.
More bankruptcies are anticipated in the retail sector.
The virus-induced recession has cratered spending in most sectors of the economy and accelerated shifts in where people shop, mostly to the benefit of online retailers like Amazon.com.
Online sales are up a sizable 31% from a year ago.
Brooks Brothers was one of the few national chains that produced its clothing in the US. In March, it shifted some production at plants in New York, North Carolina and Massachusetts to produce 150,000 masks per day for frontline healthworkers.
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