Brooks Brothers filed for Chapter 11 bankruptcy protection early Wednesday in a Delaware court, as it continues to search for a buyer.
To support its operations in bankruptcy, Brooks Brothers has secured $75 million in debtor-in-possession financing from brand management firm WHP Global, which is backed by Oaktree Capital and BlackRock. That comes on top of a $20 million loan it secured from Gordon Brothers in May.
In early April, it began to evaluate which of its roughly 250 North American stores to close. It has already decided to close about 51, a decision it attributes to the pandemic. Most of those closures have already begun, and the company has moved inventory from the targeted stores to distribution centers. The retailer is proceeding with plans to reopen the majority of stores it shut due to the pandemic.
By August 15th, it will cease its manufacturing work at facilities in Massachusetts, North Carolina, and New York, where it produces suits, ties, and some shirts. Those facilities produce about 7 percent of the brand’s goods.
Brooks Brothers generated more than $991 million in sales last year, roughly 20 percent of which were online. It has wholesale agreements with retailers like Macy’s and Nordstrom and contracts to manufacture uniforms for NetJets, United Airlines, and others.
Since opening its doors on April 7, 1818, in New York City, Brooks Brothers has grown from a small family haberdasher to a global brand that has shaped and defined American style through its product innovations.
American fashion today is a result of years of innovations and revolutionary disruptions by Brooks Brothers. While perhaps best-known today as a “classic” brand, it is important to note that the brand’s founder, Henry Sands Brooks (1772 – 1833), was no traditionalist at all. He was actually a dandy and an influencer among his peers, always on the lookout for the newest and most novel styles for his emporium in lower Manhattan selling “every new style of cloth, of the finest quality, made to order in the best and most fashionable mode.”
Throughout its history, Brooks Brothers has forged relationships for generations of customers: artists and politicians, working people and captains of industry, and Hollywood legends, as well as 40 out of 45 U.S. Presidents.
Claudio Del Vecchio, the son of the founder of Italian eyewear giant Luxottica, is the brand’s current owner and has focused on restoring the brand’s quality since acquiring it from British retailer Marks & Spencer in 2001 for $225 million.
“For over 200 years, Brooks Brothers has remained resilient, navigating evolving fashion trends, fluctuating economic cycles, and even world wars,” said Del Vecchio. “Our long history is a testament to the strength of our brand and our mission since 1818: serving customers through innovation, fine quality, personal service, and exceptional value.”
Del Vecchio continued: “Our priority is to start this important chapter with a new owner that has appreciation for the Brooks Brothers legacy, a vision for its future, and aligns with our core values and culture. Prior to COVID-19, we were already conducting an evaluation of various strategic options to position the company for future success in a rapidly transforming retail environment, including a potential sale of the business. Industry headwinds were only intensified by the pandemic. Seeking protection to facilitate an efficient sale of the business is the best next step for the company to achieve its goals, over any other alternative.”