Potential buyer line up as America's oldest fashion retailer files for bankruptcy
10 Jul 2020
The bankruptcy filing of America's oldest apparel retailer Brooks Brothers has ignited significant interest from potential buyers for the brand.
WHP Global and a venture backed by Authentic Brands Group LLC and Simon Property Group, Inc., are reportedly considering bids for the retailer. WHP Global owns the Anne Klein and Joseph Abboud brands.
New York-based brand management firm WHP Global has committed debtor-in-possession (DIP) financing of 75 million dollars for the retailer, subject to court approval, to support ongoing business operations throughout the sales process.
The beleaguered retailer filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the District of Delaware on Wednesday as it closes down dozens of stores and seeks a buyer.
Founded more than two centuries ago, the apparels of the iconic Brooks Brothers brand were worn by nearly 40 past U.S. Presidents, including Abraham Lincoln and John F. Kennedy. It was the first American brand to offer ready-to-wear clothing. It also crafted U.S. military uniforms from the Civil War through today.
Prior to the COVID-19 outbreak, the retailer had begun to evaluate various strategic options, including a potential sale of the business. Amid the outbreak, it decided to close down 51 of its stores in North America.
Founded in New York, Brooks Brothers has become an international retailer with over 250 stores in North America and 500 worldwide in 45 countries.
The retailer said it will continue to serve customers online and will proceed with a plan to reopen a majority of the 51 retail stores that were temporarily closed due to COVID-19.
The company noted that it will commence a competitive auction where parties can submit qualified bids. It expects to complete the sale process over the next few months, pending court approval.
Brooks Brothers survived two world wars and managed to keep afloat during the Great Depression in the 1930s and the 2008 global financial crisis.
Across the country, the majority of retail stores have been forced to close stores for months due to the Covid-19 lockdown restrictions, hurting their sales. Even before the pandemic outbreak, slowing foot traffic amid the ever-increasing online competition from industry majors and the changing consumer habits had led to many retailers shuttering stores and seek bankruptcy protection.
Recently the pandemic outbreak has pushed retailers such as J. Crew, J.C. Penney and Neiman Marcus into bankruptcy.(DPA)