Men’s Wearhouse owner Tailored Brands might be the next significant retail company in the United States to make a bankruptcy filing as the COVID-19 crisis unfolds. Tailored — also the owner of K&G and Jos. A. Bank — included the potential for bankruptcy, or even the closing of operations, in a recent filing, CNN reported.
The filing reportedly said: “If the effects of the Covid-19 pandemic are protracted and we are unable to increase liquidity and/or effectively address our debt position, we may be forced to scale back or terminate operations and/or seek protection under applicable bankruptcy laws.”
Tailored Brands has approximately 1,400 U.S. and Canadian retail locations and roughly half of those are Men’s Wearhouse stores. With many of its stores closed, the firm had halted rent payments for April and May. Additionally, the company laid off or put on leave 95 percent of its 19,000 staffers.
The retailer has had the ability to arrive at rent deferrals for a sizable share of its locations, with repayment to begin with the start of next year. Sales at stores open for one week (at a minimum) for the week concluding June 5, however, dropped by 65 percent at Men’s Wearhouse, had fallen 78 percent at Jos. A Bank and 40 percent at K&G.
Tailored Brands had $201 million in unrestricted cash on hand in early June. However, it had drawn down on current credit lines of $310 million amid Q1. As a result, it had just $89 million of such borrowing left.
In separate news, Ascena Retail Group, the owner of Ann Taylor and Lane Bryant was reportedly in discussions with lenders about a potential bankruptcy filing per news earlier in June. A Chapter 11 filing would allow the firm to keep the operation of some of its brands as it seeks to sell other names and could come as soon as July.