Tailored Brands May File for Bankruptcy During Weekend

Tailored Brands, owner of Men’s Wearhouse and Jos. A. Bank, may file for bankruptcy protection as soon as this weekend, a media report says.
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Shares of Tailored Brands  (TLRD) - Get Report sank Friday after a report that the owner of apparel chains Men’s Wearhouse and Jos. A. Bank may file for bankruptcy as soon as this weekend.

The move would enable the clothes seller to slash its debt and shutter money-losing stores, knowledgeable sources told Bloomberg. 

Tailored Brands would get a loan so it can keep operating through the bankruptcy proceedings, they said.

Shares of the company recently traded at 32 cents, down 16%. They have plunged 92% year to date.

The company has suffered as consumers shift from business clothes to more casual apparel, and as they abandon brick and mortar stores for the Internet. The coronavirus pandemic is a crushing blow in that respect.

Tailored Brands indicated Monday that a bankruptcy is likely on the way. In a filing with the Securities and Exchange Commission, the Houston company said it was “likely that we will pursue a reorganization under applicable bankruptcy laws, possibly as soon as during the third quarter of fiscal 2020, which begins on Aug. 2, 2020.”

Specifically, the company said in the filing that it didn't have enough cash on hand or expected cash to pay its creditors under its asset-backed-loan facility beginning in the fourth quarter of fiscal 2020.

In this scenario, shareholders probably will be wiped out, the company said.

Tailored Brands earlier this month said it would cut about 20% of its corporate positions by the end of the second quarter and close as many as 500 stores due to "the unprecedented and industrywide business disruptions resulting from the coronavirus pandemic." The move was to result in a $6 million second-quarter charge.