Tailored Brands, Inc., parent company of Men’s Wearhouse and Jos. A. Bank, has entered into a restructuring support agreement (RSA) with more than 75 percent of its senior lenders. The company said in a statement that to implement the terms of the RSA, the company has filed voluntary Chapter 11 petitions in the United States Bankruptcy Court for the Southern District of Texas.
“The unprecedented impact of Covid-19 requires us to further adapt and evolve. Reaching an agreement with our lenders represents a critical milestone toward our goal of becoming a stronger company that has the financial and operational flexibility to compete and win in the rapidly evolving retail environment,” said Tailored Brands President and CEO Dinesh Lathi.
Tailored Brands files for Chapter 11 protection
Throughout the restructuring process, the company expects that its four retail brands, Men’s Wearhouse, Jos A. Bank, Moores Clothing for Men and K&G Fashion Superstore, will continue to serve the customers.
The company added that it has received commitments for 500 million dollars in debtor-in-possession financing from its existing revolving credit facility lenders. Following Court approval, this financing, combined with cash on hand and cash flow generated by the company’s ongoing operations, is expected to be sufficient to meet the its operational and restructuring needs.
The RSA further contemplates that the DIP financing will convert to a 400 million dollars revolving credit facility from existing lenders upon the company’s emergence from Chapter 11.
The company announced in July it would be cutting around 20 percent of its corporate workforce and closing around 500 retail stores to mitigate the financial impact of the Covid-19 pandemic.