A arrives at the United States District Bankruptcy Court for the Southern District of New York in Manhattan, New York, USA, January 9, 2020. REUTERS / Brendan McDermid
(Reuters) – Clothing brand Brooks Brothers filed for Chapter 11 bankruptcy on Wednesday, joining a list of decades-old American retailers that have collapsed under the impact of the coronavirus crisis.
The 200-year-old apparel retailer, the first to adapt the button-up polo shirt in 1896, said its strategic review process was still underway and that filing for bankruptcy would help it obtain additional financing to facilitate the sale.
“During this strategic review, COVID-19 became immensely disruptive and wreaked havoc on our business,” said a company spokesperson.
Owned by Italian billionaire Claudio Del Vecchio, the private company boasts of having dressed 40 former US Presidents, including John F. Kennedy and Barack Obama, and has around 500 stores worldwide, most of which had to be closed due to restrictions led by the coronavirus. .
The company had already been struggling when corporate America, including Wall Street, relaxed its dress code for employees, allowing them to choose casual attire over tailored suits.
“The current pandemic has accelerated the challenges that the industry and our business have faced for some time,” the spokesperson said.
Disruptions in the retail sector led luxury retail chain Neiman Marcus Group, clothing retailer J. Crew Group Inc and JC Penney Co Inc to file for bankruptcy protection after attempts to rework their finances failed.
Brooks Brothers said it raised $ 75 million in debt-in-possession financing and that, along with cash flows from ongoing operations, it would give it liquidity to back it up during the sale process.
In a Delaware District court filing, the company stated that it had assets and liabilities between $ 500 million and $ 1 billion.
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