Tailored Brands, which owns Men’s Warehouse, Jos. A. Bank may close up to 500 stores nationwide
FREMONT, CALIF. – The parent company for Men’s Warehouse has filed for bankruptcy and may close up to 500 locations among four retail chains.
Tailored Brands, Inc., the parent company for menswear retailers Men’s Warehouse, Jos. A. Bank, Moores Clothing for Men and K&G Fashion Superstore, filed for voluntary Chapter 11 bankruptcy on Aug. 2 in United States Bankruptcy Court for the Southern District of Texas.
On July 21, Tailored Brands announced restructuring plans including closing up to 500 retail stores, eliminating approximately 20% of its corporate positions and realigning its supply chain infrastructure to focus on high performing stores and e-commerce. The company had not released a list of stores as of press time but there is a store located at 2226 S. Mooney Blvd. Unit A15 in Visalia.
Tailored Brands president and CEO Dinesh Lathi said that while the company had reopened all of its retail stores the pandemic and subsequent shut downs significantly reduced its in-store business.
“Unfortunately, due to the COVID-19 pandemic and its significant impact on our business, further actions are needed to help us strengthen our financial position so we can navigate our current realities,” Lathi said. “It is always difficult to eliminate jobs and say farewell to our friends and colleagues. I want to thank our teammates affected by these changes as well as those who continue to help us meet the challenges currently facing our industry and who remain dedicated to serving our customers.”
Additional information will be shared with impacted employees and customers as decisions are made, and store updates, hours and safety measures will continue to be available via the store locators on each of the company’s brand web sites: menswearhouse.com, josbank.com, kgstores.com and mooresclothing.com.
Lathi added, “While today’s announcement is a difficult one, we are confident these are the right next steps to protect our business and position us to more effectively compete in today’s environment.”
In connection with these corporate personnel changes, the company expects to record a pre-tax charge of approximately $6 million in the second quarter of fiscal 2020 for severance payments and other termination costs, all of which are cash costs.
The reorganization went all the way to the top as Jack Calandra, executive vice president, chief financial officer and treasurer, left the company on July 31. In the near term, Calandra’s responsibilities will be divided between Lathi and Holly Etlin, a managing director at AlixPartners who has been appointed to the newly created role of chief restructuring officer, reporting directly to Lathi. Etlin brings more than 30 years of restructuring experience and a deep expertise in retail, and has been working closely with the executive team and board of directors as an advisor since late March.
As of June 5, Tailored Brands was operating 634 stores but reported across the board drops in sales. Sales were down two-thirds at Men’s Warehouse, three quarters at Jos. A. Bank, 40% at K&G and 32% online. In the second quarter of fiscal 2020, the company sold one distribution center and one owned store for total net proceeds of $13.4 million. As of June 5, 2020, cash and cash equivalents were $201.3 million, excluding $93.5 million of restricted cash.
“The impact of the COVID-19 pandemic is truly unprecedented,” Lathi said. “I am extremely proud of our leadership and teams for rising to the occasion by quickly and decisively taking measures to protect the health, safety and welfare of our employees, customers and the communities we serve, as well as managing our liquidity. While many of these actions were difficult, such as furloughing/temporarily laying off more than 95% of our employees and implementing salary reductions, they were necessary given the impact of the disruptions from the COVID-19 pandemic on our business.”
Additional resources for customers and other stakeholders can be accessed by visiting the company’s restructuring web site at TailoredStronger.com.