HOUSTON, United States – Tailored Brands, the owner of Men’s Wearhouse, filed for bankruptcy on Sunday and was added to a list of physical retailers who succumbed to the economic impact of the Covid-19 crisis.
The retailer has filed for Chapter 11 bankruptcy with the U.S. bankruptcy court for the southern district of Texas, according to a court filing.
Clothing retailers were hit hardest by the coronavirus crisis because their businesses were considered non-essential and their stores had to close. They were forced to limit operations to online, leading to staff layoffs and unpaid leases and rent.
Tailored Brands said in a statement that it has entered into a restructuring deal with more than 75 percent of its senior lenders, and that could cut the company’s debt by at least $ 630 million.
The company said it has received commitments from its existing lenders for $ 500 million in debtor financing.
In the lawsuit, the company listed both its assets and liabilities between $ 1 billion and $ 10 billion.
The Houston, Texas-based retailer, who has already struggled with competition from fast-fashion brands and a shift to pre-pandemic online shopping, said it will continue to build on its previously announced plans to cut corporate workforce by 20 percent and to close as many as 500 stores.
The company added that Men’s Wearhouse, Jos. A. Bank, Moores Clothing for Men and K&G Fashion Superstore will continue to serve its customers.
Last week, the retailer expressed doubts about his ability to continue as a going concern within a year due to liquidity cuts and non-payment of interest.
Lord & Taylor, a legendary department store chain founded in 1826, billed as the oldest in the United States, also filed for Chapter 11 bankruptcy on Sunday.
By Sabahatjahan Contractor; editor: Aditya Soni and Sherry Jacob-Phillips