Tailored Brands Inc TLRD has filed for a voluntary Chapter 11 bankruptcy, the company announced Sunday. It's also carrying out a restructuring plan supported by 75% of its senior lenders.
The retailer, which owns Men’s Wearhouse, Moores Clothing for Men, Jos. A. Bank, and K&G Fashion Superstore, noted it has entered into a restructuring support agreement with its lenders that will reduce its debt burden by $630 million.
The company filed for Chapter 11 petitions in a United States Bankruptcy Court in Houston on Sunday and says its four brands will continue to operate during the proceedings.
The menswear retailer’s sales have come under pressure due to the COVID-19 pandemic. It operates 1,400 stores and employs 19,300 workers in the U.S. and Canada, the Wall Street Journal noted.
BlackRock, Inc BLK, Scion Asset Management LLC, and Vanguard Group were reported to be large investors in the clothing company, as of May.
Why It Matters
The company started reopening its stores post-pandemic in May and reiterated a slew of measures it was carrying out to maximize liquidity, including accessing $310 million in additional borrowings from its credit facility.
It extended payment terms with its suppliers, vendors, and landlords, and announced pay reductions for its executives and employees.
The company reported a drop 60.4% in net sales at $286.7 million for the first quarter this year, but posted an adjusted profit of $29.7 million.
Last month, Tailored Brands said it had identified 500 stores for potential closure and would eliminate 20% of its corporate positions. The retailer said it had reopened 96% of its stores in compliance with health and government regulations.
Tailored Brands shares closed almost 21.2% lower at $0.30 on Friday and gained nearly 2.3% in the after-hours.
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