Jul 08, 2020
1  Likes 0 Comments
About this Deal
New York (CNN Business)Brooks Brothers, the 200-year-old menswear retailer that has dressed 40 US presidents and unofficially became the outfitter of Wall Street bankers, has filed for bankruptcy.
The privately held company had been struggling as business attire grew more casual in recent years. But it has been decimated by the coronavirus pandemic, which sent demand for suits plummeting. Many working-from-home employees opted for far more relaxed looks of T-shirts and sweatpants rather than pinstripe suits and custom shirts.
"Although the pandemic has severely eroded the outlook for the business, Brooks Brothers has long suffered from a failure to decisively adapt to changing trends," said Neil Saunders, the managing director of GlobalData Retail. "When it comes to tastes and style, Brooks Brothers has been swimming against the tide."
Brooks Brothers filed for Chapter 11 early Wednesday in a Delaware court. It had warned in June it would lay off nearly 700 workers in three states and is seeking a buyer because coronavirus destroyed its business.
The company has been evaluating various strategic options, including a potential sale. But it has struggled to find a buyer. A company spokesperson told CNN Business that it expects to "complete the sale process within the next few months."
The retailer is in the process of shuttering 20% of its 250 US stores. According to the bankruptcy filing, Brooks Brothers has secured $75 million in financing to continue operating.
"The purpose of this filing is to obtain additional financing and facilitate a sale process in an efficient manner to maximize value for our stakeholders and ensure that our iconic brand is positioned to continue under new ownership," a company spokesperson said.