Tailored Brands Inc. could be the next major nationwide retail firm to file for bankruptcy.
The Houston-based company — parent to Men’s Wearhouse, Jos. A. Bank, Moores Clothing for Men and K&G — wrote in a recent filing with the Securities and Exchange Commission that the coronavirus crisis has caused “significant disruptions” to its day-to-day operations.
Since mid-March, many of the retail group’s stores, as well as its corporate offices, were temporarily closed in accordance with government-mandated lockdowns. Tailored Brands made the decision to furlough more than 95% of its workforce and implement salary reductions for senior-level executives. It also noted that both the market price of its common stock and total revenues had declined over the past couple months.
“If the effects of the COVID-19 pandemic are protracted and we are unable to increase liquidity and/or effectively address our debt position, we may be forced to scale back or terminate operations and/or seek protection under applicable bankruptcy laws,” it shared.
Tailored Brands also requested a 45-day extension to file its first-quarter financial results, which is expected to be released no later than July 27. In the meantime, it presented preliminary numbers for the three-month period ended May 2: Revenues plunged 60.4% to $286.7 million, as all stores remained closed through the end of the quarter.
On May 7, the company began to open stores across North America and currently has 634 stores back in business. For the week ended June 5, with those outposts open for at least one week, the average same-store sales performance at Men’s Wearhouse was down about 65%, while Jos. A. Bank’s and K&G’s comps dropped a respective 78% and 40%.
Tailored Brands has roughly $244.2 million of cash and equivalents, while its long-term debt totals approximately $1.4 billion. It has accessed $310 million of additional borrowings from its credit facility to bolster its business, as well as deferred operating expenses and inventory purchases.
“While it’s still early and the operating environment remains highly uncertain, we anticipate sales will rebuild gradually during the remainder of the year,” president and CEO Dinesh Lathi said in a statement. “We are planning the business conservatively and will continue to operate with discipline to preserve our liquidity as we navigate this uncertain environment.”