One of the United States' oldest clothiers Brooks Brothers has filed for Chapter 11 bankruptcy protection.
The 200-year-old retailer is the latest victim of the economic downturn caused by the coronavirus pandemic, which has already seen the collapse of several major players in the country's retail industry.
Similar to other retailers, Brooks Brothers has been struggling to keep afloat as the pandemic had resulted in a greatly reduced demand for its products. The company, which is unofficially the outfitter of presidents and CEOs, was particularly affected as bankers, executives, and office workers were forced to work from home during the nationwide shelter-in-place orders and lockdowns.
The forced nationwide "casual Friday" resulted in plummeting demand for the company's shirts and suits, severely affecting its ability to continue operations. Analysts have also pointed out that Brooks Brothers would have eventually collapsed even without the pandemic given its continued failure to adapt to changing consumer demands and trends.
Brooks Brothers officially filed for bankruptcy on Wednesday in a court in Delaware. Prior to the filing, the retailer had implemented massive job cuts that affected nearly 700 workers in three states. The company also previously announced that it was actively looking for a buyer for its struggling business.
Unfortunately, given the current state of the economy, Brooks Brothers has had a hard time finding a buyer. The company had explored various strategic options to keep its business afloat but it eventually chose to file for bankruptcy as it could no longer keep up with its expenses.
According to its bankruptcy filing, Brooks Brothers has secured an additional $75 million in loans to help it continue its operations during the process. However, it revealed that it may need to shut down around 20 percent of its 250 outlets in the US.
In a statement, Brooks Brothers explained that the purpose of the filing was for the company to gain enough time to acquire additional financing and to find a suitable buyer for the business. It added that the company simply wants to maximize value for its shareholder and to make sure that its iconic brand will survive, even if it is under new ownership.
Brooks Brothers, which was established in 1818, has been producing custom and ready-made suits for businessmen across the country. The company is attributed to investing several business attire trends, including the original button-down polo shirts that have become common in today's corporate world. Brooks Brothers is currently owned by Italian billionaire, Claudio Del Vecchio, who bought the company from Marks and Spencer for $225 million in 2001.
