New York City and Freemont, Calif. — The list of apparel retailers to file for Chapter 11 bankruptcy grew longer over the weekend as the parent companies of Lord & Taylor and Men’s Wearhouse both filed petitions for Chapter 11 bankruptcy protection in an effort to restructure their debt loads.
Le Tote Inc., a New York City-based e-commerce firm specializing in the clothing sector that owns Lord & Taylor, filed its petition in the U.S. Bankruptcy Court for the Eastern District of Virginia. Tailored Brands, the Fremont-based parent company of Men’s Wearhouse and Jos. A. Bank, filed in a district court in Texas.
Le Tote acquired Lord & Taylor about a year ago for $100 million from Hudson’s Bay Co. At that time, Lord & Taylor operated about 40 department stores around the country. Approximately half of those stores will now close.
In mid-March, Hudson’s Bay Co., the Canadian firm that also owns Saks Fifth Avenue, also sold a 660,000-square-foot office building in Manhattan that had served as Lord & Taylor’s office hub. Amazon bought the property for $1.15 billion to serve as its New York City headquarters.
Two weeks ago, Tailored Brands unveiled a corporate restructuring plan that involved closing up to 500 stores. Tailored Brands also owns K&G Fashion Superstore and Moores Clothing for Men for a total footprint of about 1,445 stores totaling 9.1 million square feet as of May 2020.
In the past month, Tailored Brands has missed interest payments on bonds and cut its corporate staff by 20 percent. The company posted a 60 percent decline in sales during its fiscal first quarter, which ended May 2, and was notified in July that it would be delisted from the New York Stock Exchange.
In announcing its Chapter 11 filing, Tailored Brands said it received $500 million in debtor-in-possession financing from its various creditors. The company did not specify whether it would be closing more stores in addition to those announced two weeks ago.
“We have made significant progress in refining our assortments, strengthening our omnichannel offering and evolving our marketing channel and creative mix,” says Dinesh Lathi, president and CEO of Tailored Brands. “However, the unprecedented impact of COVID-19 requires us to further adapt and evolve. Reaching an agreement with our lenders represents a critical milestone toward having the financial and operational flexibility to compete in the rapidly evolving retail environment.”
— Taylor Williams