Tailored Brands Inc., which owns menswear brands Men's Wearhouse and Jos. A. Bank, has filed for bankruptcy protection, severely hit by sluggish demand amid the coronavirus woes.
The company filed for chapter 11 protection in the U.S. Bankruptcy Court for the Southern District of Texas to implement financial restructuring plan.
The specialty retailer of menswear has entered into a restructuring support agreement or RSA with more than 75 percent of its senior lenders. The pre-arranged financial restructuring plan is expected to reduce the company's funded debt by at least $630 million.
The restructuring has commitments for $500 million in debtor-in-possession or DIP financing from its existing revolving credit facility lenders.
Upon the company's emergence from Chapter 11, the DIP financing will convert to a $400 million revolving credit facility from existing lenders.
During the restructuring process, its four retail brands, Men's Wearhouse, Jos. A. Bank, Moores Clothing for Men and K&G Fashion Superstore, will continue their operations.
Tailored Brands President and CEO Dinesh Lathi said, "As evidenced by the positive results we saw in January and February, we have made significant progress in refining our assortments, strengthening our omni-channel offering and evolving our marketing channel and creative mix. However, the unprecedented impact of COVID-19 requires us to further adapt and evolve."
The latest decisions follow the company's announcement on July 21 of its organizational changes, including plans to reduce its corporate headcount by about 20 percent, and up to 500 retail stores closures, among others.
The company in June had requested a 45-day extension to file its Form 10-Q for the first quarter due to the significant business disruption caused by the COVID-19 pandemic.
In the first quarter, net sales were down 60.4 percent. The company, which reported 2.4 percent rise in total retail comparable sales in February with positive results in all brands, had to close all stores on March 17 and all e-commerce fulfillment centers in the U.S. and Canada on March 20.
The company then had taken decisive actions to manage its cash position and reduce cash outflows amid store closures and the deteriorating economic environment.
In late July, Ascena retail group, inc., which owns Ann Taylor, LOFT, Lane Bryant, and Justice brands, among others, had filed for Chapter 11 Bankruptcy protection aiming to significantly reduce its debt by around $1 billion.
Brooks Brothers Group Inc., more-than-200- year old apprel retailer, had filed for bankruptcy recently, joining the string of retailers hit by Coronavirus pandemic.
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