Men’s Wearhouse, Jos. A. Bank Parent Company Weighing Bankruptcy: Here’s Why

The parent company of Men’s Wearhouse and Jos. A. Bank, Tailored Brands (TLRD), is weighing a potential bankruptcy filing as workers across the U.S. opt for casual wear while working from home during the coronavirus pandemic.

Sales of Tailored Brands’ suits, ties, and formal wear sold under the two brands have taken a hit as weddings have been postponed due to COVID-19, and professional attire took a backseat in a new at-home work environment.

Tailored Brands is looking to rework more than $1 billion in debt, which could include a Chapter 11 bankruptcy filing, sources told Bloomberg. Under the filing, the retailer would close underperforming stores and meet obligations to creditors while continuing to operate the majority of its locations, the sources said.

While no decision has been made by Tailored Brands, the company is exploring all of its financing options and has hired law firm Kirkland & Ellis and investment bank PJT Partners, the news outlet said.

Tailored Brands saw its sales slump after it temporarily closed stores because of the coronavirus. Despite the pandemic, the company was reportedly struggling to gain a foothold beforehand, seeing its sales decline for both brands over the last few years.

In May, the company said it was continuing “its efforts to maximize its liquidity.” At the time, Tailored Brands drew $310 million from its revolving credit facility, deferred capital expenditures, extended payment terms with its vendors, suppliers, and landlords, and implemented 10% to 50% salary reductions for officers and employees paid $100,000 or more.

Shares of Tailored Brands stock were down 18.4524% as of 11:44 a.m. EDT on Tuesday.