The company has identified 500 stores for closings and said it is cutting 20% of its corporate positions in hopes of strengthening its “financial position and allowing it to compete more effectively in the challenging retail environment,” according to a statement. The company has around 1,500 stores in the United States, with about half operating under the Men’s Wearhouse name.
“Unfortunately, due to the Covid-19 pandemic and its significant impact on our business, more action is needed to help us strengthen our financial position so that we can navigate our current realities,” said Tailored Brands CEO Dinesh Lathi.
Store closings and the resulting layoffs will cost the company $ 6 million in severance pay and other termination costs, Tailored Brands said. Stores will close “over time” and have not yet “quantified the cost savings and costs associated with possible store closings.”
Although most of its stores have reopened, sales have decreased. For the week ending June 5, sales at locations open for at least a week fell 65% at Men’s Wearhouse. They fell 78% in Jos. A. Bank and 40% in K&G. Sales decreased 60% in its first fiscal quarter, which ended on May 2. All of its stores closed for about half the quarter, and its online operations stopped for two weeks in March.
GlobalData Retail said in a recent note that annual sales of men’s formal wear fell 74% between April and June.
“While this deterioration will decrease over time, demand will continue to be subdued for the rest of 2020 and well into 2021 as office work, business meetings and socialization are reduced,” the firm said.
– CNN Business’s Chris Isidore contributed to this report.
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