After more than 200 years of dressing American office workers and prep-conscious North-Easterners, Brooks Brothers formally filed for bankruptcy protection on Wednesday, the latest retailer to succumb to the coronavirus pandemic and its impact on consumers’ shopping habits.
Owned by Italian businessman Claudio Del Vecchio, Brooks Brothers filed for bankruptcy protection in Wilmington, Del., on Wednesday. The filing had been anticipated following a warning last month that the company was considering closing its three U.S. factories.
Brooks Brothers joins a list of U.S. retailers who have been forced to seek relief from debtors amid the coronavirus pandemic and shutdown that has not only kept consumers out of its brick-and-mortar stores but also re-shaped shopping habits - away from less-essential goods like clothing and even further away from business and formal attire amid stay-at-home orders.
Neiman Marcus, J.Crew, and J.C. Penney (JCP) - Get Report have also filed for bankruptcy protection since mid-March alongside other non-retail companies including Hertz Global Holdings (HTZ) - Get Report and Chesapeake Energy (CHK) - Get Report.
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Brooks Brothers said it has secured a $75 million debtor-in-possession loan from WHP Global, according to The Wall Street Journal. WHP, backed by Oaktree Capital and Blackrock, is a brand-management firm that owns the Anne Klein and Joseph Abboud apparel brands.
Brooks Brothers is expected to attract buyers, according to people familiar with the situation. Authentic Brands Group LLC, a licensing company that owns the Barneys New York and Sports Illustrated names, is a potential suitor, the Journal said.
Founded in 1818, Brooks Brothers pioneered ready-made suits as well as the first button-down-collar shirt, an idea gleaned from the founder's grandson who noticed that English Polo players’ collars didn’t flap in the wind when they were riding because they were buttoned down.