The company, parent to Men’s Wearhouse and Jos. A. Bank, said in a filing with the Securities and Exchange Commission late Monday: “We have determined that there is substantial doubt about our ability to continue as a going concern. Although we are evaluating several alternatives, it is likely that we will pursue a reorganization under applicable bankruptcy laws, possibly as soon as during the third quarter of fiscal 2020, which begins on Aug. 2, 2020.”
The writing has been on the wall for while.
Not only did Tailored Brands find itself selling men’s formal wear just as the world became more casual, the trend moved forward at light speed when the coronavirus sent people home to work, causing ath-leisure looks to gain even more.
Tailored Brands Inc. missed a $6.1 million interest payment on July 1, starting a 30-day grace period, which runs out this week. Missing the interest payments will cause a cascade effect with the firm’s debts, which total about $2 billion.
“Absent obtaining a waiver from our lenders or negotiating an agreement to avoid acceleration of our indebtedness, we will be in default on all of our indebtedness and we do not have sufficient liquidity to repay the amounts due under our indebtedness, consisting of our term loan, senior notes and [asset-backed loan] facility,” the company said.
The retailer is working with advisers and evaluating alternatives, including a private restructuring.
“Management is also evaluating various alternatives to improve our liquidity, including but not limited to, lease concessions and deferrals, further reductions of operating and capital expenditures, and raising additional capital,” the firm said.
But the list of retailers and fashion brands that were caught in COVID-19, sought alternatives and ended up filing anyway is long and, seemingly growing. Among the retailers that have filed so far are Neiman Marcus Group, J.C. Penney Co. Inc., J. Crew Group, Brooks Brothers and, most recently, Ascena Retail Group.
For the quarter ended May 2, Tailored said it lost $269.9 million as sales fell 60 percent to $286.7 million.