Time Has Come for Tailored Brands Bankruptcy: Jim Cramer
Tailored Brands, which owns Men's Wearhouse and JoS A. Bank brands, is "likely" to pursue chapter 11 bankruptcy protection as soon as its fiscal third-quarter due to sales plunging related to the coronavirus pandemic and economic collapse.
In a filing made with the Securities and Exchange Commission on Monday, the Houston-based 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 doesn’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.
Per the retailer, "Management is exploring alternatives, “including seeking a restructuring, amendment or refinancing of our debt through a private restructuring or reorganization under applicable bankruptcy laws."
Earlier this month, the company said that 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," resulting in a $6 million second-quarter charge.
Jim Cramer said that this has been a long time coming.