Famed clothier Brooks Brothers files for bankruptcy

Daniel Fowler
July 10, 2020

Brooks Brothers was one of the few national chains that produced its clothing in the U.S. In March, it shifted some production at plants in New York, North Carolina and MA to produce 150,000 masks per day for front-line health workers.

Brooks Brothers Group Inc. filed for bankruptcy, felled by the pandemic's impact on clothing sales and its own heavy debt load.

While it's in the process of reopening most of its stores, it expects to close 51 stores in the United States.

Brooks Brothers joins a long list of notable retailers that have filed for Chapter 11 in the last few months, including J.C. Penney, J. Advertisement According to the New York Times, Brooks Brothers was considering restructuring even before the coronavirus pandemic hit, as annual sales were flat at around $1 billion for the years 2017 through 2019.

The virus-induced recession has cratered spending in most sectors of the economy and accelerated shifts in where people shop, mostly to the benefit of online retailers like Amazon and eBay.

The Chapter 11 bankruptcy filing in DE allows Brooks Brothers to keep operating while it works out a plan to turn the business around and pay its debts.

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Morneau said the debt is manageable, because of borrowing costs that are actually lower than a year ago due to falling interest rates.

"For over 200 years, Brooks Brothers has remained resilient, navigating evolving fashion trends, fluctuating economic cycles, and even world wars", said Del Vecchio in the statement.

Jonathan Pasternak, a bankruptcy lawyer at Davidoff Hutcher & Citron, said that even before the pandemic, Brooks Brothers' store expansion and the cost of making clothes in the USA had created a financial burden, but he does not believe the company will disappear.

With the filing, Brooks Brothers joins a host of other companies - including Neiman Marcus Group and J. Crew Group - that found themselves heavily indebted and without enough to reinvent their businesses in the midst of the pandemic.

But its cultural influence has been broad.

Matt Ott reported from Silver Spring, Maryland.

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