The coronavirus recession has done in one of the nation’s oldest and best-known retailers: Brooks Brothers.
The 202-year-old brand that claims to have dressed all but four U.S. presidents and legions of business executives in crisp Oxfords, classic suits and polos for casual Friday, filed for bankruptcy protection Wednesday as it continues its search for a buyer, according to a company spokesperson.
The company expects to close 51 of its 250 North American stores and will halt production next month at its factories in Massachusetts, North Carolina and New York, which produce less than 7% of its finished goods. Remaining stores will reopen in compliance with local public health orders tied to the coronavirus pandemic. The Brooks Brothers store in Seattle and the outlet in Auburn are listed as temporarily closed on the company website.
Brooks Brothers, owned by its chief executive, Claudio Del Vecchio, has long sought a buyer and has not struggled to field bids. But the pandemic, along with changing workplace fashion trends, disrupted the sale process. The company secured $75 million in debtor-in-possession financing to continue its operations during the sale process. Adding to the company’s woes are sky-high rents in some of the nation’s priciest shopping centers. Brooks Brothers has eight stores in Manhattan alone, as well as flagships in downtown Chicago, San Francisco’s Union Square and on Rodeo Drive in Los Angeles.
In its bankruptcy filing, the company said it owes between $500 million and $1 billion to as many as 25,000 creditors, including at least $8 million in rent. It listed assets of $500 million to $1 billion.
“Our priority is to start this important chapter with a new owner that has appreciation for the Brooks Brothers legacy [and] a vision for its future,” Del Vecchio said in a statement.
Brooks Brothers is the latest large American apparel retailer to struggle under the weight of the pandemic, following J.C. Penney, J. Crew and Neiman Marcus into bankruptcy court. Ascena Retail, which operates Ann Taylor and Lane Bryant, could be next; Bloomberg News reported that a filing could come as soon as this week.
Founded in Manhattan in 1818, Brooks Brothers is the country’s oldest clothing retailer. Over the years, it has also become something of a cultural icon: The company has dressed nearly every U.S. president, as well as Civil War soldiers, and is credited with introducing ready-to-wear suits, Madras shirts and Shetland sweaters to American consumers. President Abraham Lincoln was wearing a custom Brooks Brothers coat when he was assassinated.
But in recent years, the brand, known for its “formal, old-school approach,” has been slow to keep up with consumer tastes and styles, said Neil Saunders, managing director of GlobalData Retail. It also has lost relevancy as corporate America goes casual, replacing business suits and ties with jeans and puffy vests. Younger shoppers, in particular, have flocked to more accessible competitors such as Suitsupply, Tie Bar, Bonobos, even J. Crew, which specialize in more modern styles.
“Brooks Brothers has long suffered from a failure to decisively adapt to changing trends,” Saunders wrote in a note to clients. “It has become increasingly out of step with a new generation of consumers who are looking for a more edgy approach to smart casual.”
The coronavirus dealt another blow. Millions of white-collar employees are now working from home, where they have little need for new button-downs or wingtip shoes. Sales of men’s formal clothing fell 74% in the second quarter, compared with a year earlier, he noted, and it could be years before demand returns to pre-pandemic levels.
On Wednesday, the company’s website was awash in deep discounts, including an extra 70% off clearance items. Suits originally priced at $998 had been marked down to $299, while $128 corduroy pants were selling for $38.