Brooks Brothers, the 200-year-old men’s clothing retailer who was dressed in 40 US presidents and informally became a bank trader on Wall Street, filed for bankruptcy.
The privately owned company has been struggling with its casual wear growth in recent years. But the coronavirus pandemic caused its destruction, which reduced the demand for suits. Many home-based employees choose more comfortable looks for their T-shirts and sports pants rather than striped suits and customized shirts.
Brooks Brothers filed for Chapter 11 early on Wednesday in a Delaware court. In June, it warned that it would lay off nearly 700 workers in three states and was seeking a buyer because the coronavirus had destroyed its work.
The company evaluates various strategic options, including potential sale. But she struggled to find a buyer.
The retailer is said to be closing 20% of his 250 U.S. stores. According to a bankruptcy deposit, Brooks Brothers received $ 75 million in financing to continue working.
Company background: Brooks Brothers opened its first store in 1818 near Wall Street. Years later, I started making ready-made suits for men who couldn’t wait for a tailor. In 1896, the retailer invented the original button-up polo shirt and made several other first-of-its-kind apparel, including Madras prints and a Shetland chunky jacket.
The owner of Brooks Brothers, Claudio del Vecchio, bought the brand in 2001 from Marks and Spencer for $ 225 million. Help extend the brand’s appeal beyond men, including women’s and children’s clothing and household items. He told the New York Times last month that its US factories had “never earned money” and had planned to move some operations abroad to maintain liquidity.
More context: Brooks Brothers is the last famous retailer to go bankrupt. J. Crowe, Neiman Marcus, JCPenney have all advanced in recent months, citing in part the low sales of the virus.
The epidemic struck Brooks Brothers in particular because some workers were forced to work from home, eliminating the need for new suits and elegant clothes.
GlobalData Retail said in a note Wednesday that sales of men’s formal wear declined 74% annually between April and June.
Neil Saunders, Managing Director of GlobalData Retail, writes: “While this deterioration will ease over time, demand will remain subdued for the rest of 2020 through 2021 as office work, business meetings, and social networking are reduced.” “This leaves Brooks Brothers highly vulnerable to a market of depression.”