Brooks Brothers file for bankruptcy, seeks a buyer, and closes nearly 51 stores

Brooks Brothers is a storied apparel brand founded in 1818. The retailer which is one of the oldest and most prestigious apparel retailers in the UK filed for Chapter 11 bankruptcy protection on Wednesday.

For over 200 years, Brooks Brothers dressed the American business class in pinstripes. The retailer also takes pride in dressing over 40 U.S presidents and other prestigious Wall Street bankers. The brand became famous for its office-casual look, as well as its crisp oxfords and classy sports jackets. After surviving two world wars, and terrible economic declines in all history, the 202-year-old brand has finally joined other apparel brands to file for bankruptcy.

Last year, Brooks Brothers generated over $991 million in sales, however, the coronavirus pandemic has presented the retailer with quite a few financial difficulties. It also intends to close about 51 of its 500 stores worldwide, alongside looking for a new buyer. The company is currently owned by Italian businessman Claudio Del Vecchio.

The retailer plans to pause manufacturing at its U.S factories by August 15, while it proceeds with the bankruptcy process to search for a good buyer.

“Over the past year, the Brooks Brothers’ board, leadership team, and financial and legal advisors have been evaluating various strategic options to position the company for future success, including a potential sale of the business,” a Brooks Brothers spokesperson told CNBC.

The retailer also warned in June that alongside filing for Chapter 11 bankruptcy protection it was also going to close down dozens of its stores as well as lay off nearly 700 workers in the three U.S. states where its factories are located. Brooks Brothers also announced that it had secured a $75 million loan to continue operating.

“The purpose of this filing is to obtain additional financing and facilitate a sale process in an efficient manner to maximize value for our stakeholders and ensure that our iconic brand is positioned to continue under new ownership,” the company spokesperson said.

Prior to the economic decline triggered by the coronavirus pandemic, the privately held company had struggled with its business as business attire grew more casual in recent times. With the coronavirus pandemic in place and new work-from-home rules in most companies, the demand for business attires and suits dramatically fell. Work clothes have now been reduced to more casual T-shirts and sweatpants rather than pinstripe suits.

“Although the pandemic has severely eroded the outlook for the business, Brooks Brothers has long suffered from a failure to decisively adapt to changing trends,” said managing director of GlobalData Retail Neil Sunders. “When it comes to taste and style, Brooks Brothers has been swimming against the tide.”