Brooks Brothers, a retailer originally established for menswear in 1818, filed for bankruptcy protections on Wednesday as the pandemic has taken a toll on the store’s sales.
The company filed for Chapter 11 restructuring proceedings in Wilmington, Del., after the coronavirus crisis followed years of decreasing sales. The company plans to use the bankruptcy process to acquire additional money and find a new owner for the corporation, a company spokesperson told The Hill in a statement.
Brooks Brothers has secured a $75 million debtor-in-possession loan from WHP Global, a brand-management firm, that has taken on other major retail corporations such as Anne Klein and Joseph Abboud.
The company is expected to earn the interest of buyers, people familiar with the situation told The Wall Street Journal, and Authentic Brands Group LLC, which owns Barneys New York and Sports Illustrated, could potentially purchase the company.
The retailer also announced it would shut down 51 U.S. stores out of its approximately 200 locations in North America. These shutdowns follow an announcement early this year to close three U.S. factories in New York City, Haverhill, Mass., and Garland, N.C.
Brooks Brothers, which touts that it has dressed 40 U.S. presidents, has been owned by Italian businessman Claudio Del Vecchio since 2001. The outfitter has been reviewing strategies for the future, including a possible sale, since last year, sources told the Journal.
"Prior to COVID-19, we were already conducting an evaluation of various strategic options to position the Company for future success in a rapidly transforming retail environment, including a potential sale of the business," Del Vecchio said in a statement. "Industry headwinds were only intensified by the pandemic."
The company spokesperson called the filing the "best next step" for Brooks Brothers to "achieve its goals." Their statement emphasized the filing doesn't mean the company is "going out of business" or that it "will be liquidating."
“We are in the process of identifying the right owner, or owners, to lead our iconic Brooks Brothers brand into the future,” the spokesperson added.
Brooks Brothers will reopen stores as government regulations allow and "as it is economical to do so."
The news comes as several other retailers have also filed for bankruptcy amid the economic downturn caused by the pandemic, including Neiman Marcus Group Inc., J. Crew Group Inc. and J.C. Penney Co.
Brooks Brothers has dealt with reduced sales in recent years as more workplaces allow for casual dress, leading to less men needing suits. A spokeswoman told the Journal that tailored clothes make up about a fifth of the store’s sales, while casual sportswear accounts for the rest.
Workplace attire has turned even more casual during the pandemic, as many people are working from home and fewer are attending gatherings like weddings, graduations and bar mitzvahs.
Updated at 12:16 p.m.