NEW YORK • Brooks Brothers, the retailer known for dressing the great and good of the United States since 1818, filed for bankruptcy on Wednesday, buckling under the pressure from the coronavirus pandemic, after years of faltering sales as customers embraced more casual apparel and sales shifted online.
Brooks Brothers said in a statement on Wednesday that the Chapter 11 restructuring proceedings would allow it to obtain additional financing as it facilitated a sale.
The bankruptcy is the latest high-profile retail failure during the pandemic, which has caused widespread store closures and sales declines. Since May, major names like JC Penney, Neiman Marcus and J. Crew have all been pushed into Chapter 11 proceedings.
The chains, including Brooks Brothers, plan to keep operating, though most likely in a pared-back fashion.
"Brooks Brothers is the most iconic American brand," said Mr William Susman, managing director at Threadstone Advisors. "While in a different form, I am confident the brand will survive and continue for years to come. This is a case of a failed company, not a failed brand."
Brooks Brothers, known for its suits and preppy clothes, has been hit especially hard by the virus crisis. It is an era of remote work and job interviews through Zoom, and the postponement of celebrations like weddings, bar mitzvahs and graduations.
The company, which is the oldest apparel brand in continuous operation in the US, said it had decided to close 51 US stores out of its roughly 250 locations in North America.
Earlier this year, Brooks Brothers said it would close its three factories in the US, spurring concern about the future of the brand and its identity as a "Made in America" name.
Brooks Brothers has dressed all but four US presidents and its overcoats have been worn for the inaugurations of presidents Abraham Lincoln, Barack Obama and Donald Trump, among others. It has outfitted Clark Gable, Andy Warhol and Stephen Colbert. Even Ralph Lauren started out as a salesman at Brooks Brothers in New York.
Brooks Brothers said on Wednesday it expects to complete the sale "within the next few months". It has secured US$75 million (S$104.5 million) in financing to help support it until it finds a buyer.
Names that have been discussed as potential buyers include the private equity firm Solitaire Partners, whose chairman David Jackson was briefly a contender to buy Barneys.
"The most important thing for a buyer would be having the capability to elevate the brand and reinvent the brand's image for the future," said Mr Robert Burke, founder of an eponymous consultancy. "A big risk would be if the brand just competes on price or becomes a discount or outlet brand, which would be a real shame to see."
NYTIMES
