Tailored Brands, Inc., the U.S. holding company for men's retail clothing stores including the Men's Wearhouse and JoS. A. Bank, filed for bankruptcy late Sunday as a result of falling demand for businesswear brought on by the international health crisis keeping American office workers at home.
Tailored Brands' filing was in the U.S. Bankruptcy Court in Texas. It is the latest U.S. retailer to fail in the face of competition from internet-based shopping. Lockdowns have reduced Tailored Brands' sales. Other retailers to file for bankruptcy include JCPenney, J. Crew Group, Neiman Marcus Group and Lord & Taylor.
Clothing sellers are among the worst hit by the coronavirus. Their businesses were deemed "nonessential" and their shops had to be shut. They were forced to cut operations which resulted in job losses and temporary redundancies of personnel as well as unpaid rents and leases.
Tailored Brands said the pandemic had changed the way people live and work. "There are fewer in-person meetings, fewer people going out and postponed wedding celebrations," Business Insider's Madeline Stone quoted a company statement as saying.
The company is still deciding which shops will close and said its actions would help it "right-size" its number of locations. Tailored Brands said the Chapter 11 process would include specific protections that would allow the company to provide a consistent shopping experience for their customers.
Tailored Brands had around 1,400 branches and 18,000 workers. Last month it revealed plans to cut 20 percent of its corporate staff shut up to 500 shops. On Sunday it announced it considered using the restructuring process to reduce its debt by around $630 million.
The group's four retail brands, including K&G Fashion Superstore and Moores Clothing For Men, will continue to operate throughout the process. The company had 1,274 retail and apparel-rental shops in the U.S. and 125 in Canada, court documents said.
Tailored Brands filed for bankruptcy protection with a pre-negotiated plan of restructuring backed by more than 75 percent of its senior lenders, the group said in the statement. The Chapter 11 proceeding will minimize the retailer's funded debt and will be financed by existing debt holders, the statement added.
