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The ranks of retailers seeking relief from their mountains of debt during lean times rose again late Sunday when Tailored Brands, the owner of the Men’s Wearhouse and Jos. A. Bank chains, sought Chapter 11 bankruptcy protection.
The retailer had been facing big challenges before the COVID-19 pandemic, with men increasingly opting for more casual clothing at work and the rising popularity of newer brands and services like Suit Supply. Store closings during lockdowns and millions of men not needing new suits because they’re working from home for now pushed Tailored over the edge. In its most recent quarter, sales fell 60.4% to $287 million.
The company is not alone in facing that problem: Brooks Brothers Group, Ascena Retail Group, the owner of Ann Taylor, and Neiman Marcus have all filed for bankruptcy protection in recent months Nordstrom, a much healthier company financially, has also focused much of its men’s merchandise on casual clothing in the last few years.
Tailored Brands said that its restructuring deal with more than three-fourths of its senior lenders will slash at least $630 million in debt. The company will get $500 million in bankruptcy financing to keep operating during the chapter 11 case.
Men’s Wearhouse bought Jos. A. Bank in 2014 in a bitter battle with its smaller rival, which had tried to buy it earlier as it hoped to gain a stronghold on men’s suit stores. But Jos. A. Bank’s problems proved very hard for the company to fix: Jos. A. Bank’s famous “Buy 1 Suit, Get 3 Free” not only decimated profits but also the brand’s aura, something nearly impossible to reverse. The company later changed its name to Tailored Brands to reflect its status as a portfolio company.
The company had previously warned it could file for bankruptcy protection and last month said it would lay off 20% of its corporate staff and close as many as 500 retail locations.
Department store chain Lord & Taylor also filed for Chapter 11 protection on Sunday. According to BankruptcyData.com, some 20 large private and public retailers have declared bankruptcy this year. Those have included J.C. Penney and J.Crew among others.