Brooks Brothers files for bankruptcy owing to the economic uncertainty caused by the global pandemic
Brooks Brothers, a menswear brand with its 200-year-old legacy that has attired 40 US presidents and unofficially became the clothier of Wall Street bankers, has now filed for bankruptcy.
The privately held enterprise had been having a hard time as business attire moved on to become more casual in the past few years. On the other hand, it has been destroyed by the coronavirus pandemic, which crashed the demand for suits. Numerous working-from-home staff are preferring to wear much more relaxed clothes like T-shirts and sweatpants instead of pinstripe suits and custom shirts.
The managing director of GlobalData Retail, Neil Saunders, stated: “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,” and he further added, “When it comes to tastes and style, Brooks Brothers has been swimming against the tide.”
On Wednesday, Brooks Brothers filed for Chapter 11 in a Delaware court. In June itself, the enterprise had alerted that the would-be dismissing about 700 staff members in three states and is looking out for a potential buyer as coronavirus has ruined its business.
The enterprise has been assessing different strategic possibilities, which even includes a potential sale. But they have battled to find a potential buyer. One of the enterprise’s spokesman informed CNN Business that they are anticipating to “complete the sale process within the next few months.”
The retailer is operating to wind up 20% of its 250 US stores. As per the bankruptcy filing, Brooks Brothers has already ensured $75 million in financing to remain in operation.
“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 spokesman told.
Saunders wrote: “While this deterioration will ease over time, demand will remain suppressed for the rest of 2020 and well into 2021 as office working, business meetings, and socializing are all reduced,” and even added, “This leaves Brooks Brothers very exposed to a depressed market.”