Tailored Brands announced that it is at risk of bankruptcy and even closing operations due to the Covid-19 crisis in a file on Wednesday evening.
“If the effects of the Covid-19 pandemic are long lasting and we cannot increase liquidity and / or effectively address our debt position, we may be forced to scale or terminate operations and / or seek protection according to current bankruptcy laws,” he said. The company said it has no comments beyond filing.
The company suspended lease payments in April and May, when most of its locations were closed. He said that from the end of 2020 onwards, from 2021 onwards, he was able to negotiate rent deferral negotiations for a significant number of stores. He also fired or laid off 95% of his 19,000 employees.
However, things did not go well in 44% of the Terzi Brands stores, which were reopened in early May. In the week ending June 5, sales fell 65% in the Men’s Clothing home where Jos was open for at least a week, and Jos. It dropped 78% in A. Bank and 40% in C&G.
Sales fell 60% in the first quarter of the fiscal year ended May 2. About half of all stores remained closed, and their online operations stopped for two weeks in March. But Tailored Brands has delayed reporting its full results – the Securities and Exchange Commission allows companies to delay reporting during the pandemic.
One reason for the delay is to weigh how large a fee is required to write the value of various assets, including the goodwill it carries in their books – a measure of a company’s brands and reputation. Accusation will only be a cash-free accounting movement, but it can increase the cost of borrowing required for the company to go through the crisis.
Private Brands generated $ 201 million of unlimited cash as of June 5, but that was due to a $ 310 million drop in existing credit lines in the first quarter. This remained under these lines with only $ 89 million in borrowing.
The company has 1,400 stores in the United States and Canada, about half of which are under the name of Men’s Apparel. Basu will likely have to close a significant percentage of whatever happens with his reorganization efforts.
“This is the company that has the legs needed to turn things around.” Said. “But the tastes and demands of consumers will change. They will emerge from bankruptcy, which takes up much less space.”
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