Brooks Brothers files Chapter 11 bankruptcy proceedings
July 09, 2020 - United States Of America
Brooks Brothers, America’s oldest apparel company, recently announced it has commenced Chapter 11 cases in the US bankruptcy court for the district of Delaware to facilitate a value-maximising sale process. A transaction would ensure that the brand is positioned to continue serving its loyal customers for years to come, the company said in a statement.
The company has also secured commitments for a debtor-in-possession financing facility of $75 million from WHP Global, a leading brand management firm, subject to court approval.
This capital, together with cash flows from ongoing operations, will provide liquidity to support the company through the sale process. This includes honouring certain employee-related wages and benefits obligations, paying claims of certain critical vendors and suppliers, and ensuring the continuation of other operations in the ordinary course of business with as minimal interruption as possible.
“For over 200 years, Brooks Brothers has remained resilient, navigating evolving fashion trends, fluctuating economic cycles, and even world wars,” said Claudio Del Vecchio, chairman and chief executive officer.
“Our priority is to start this important chapter with a new owner that has appreciation for the Brooks Brothers legacy, a vision for its future, and aligns with our core values and culture....Industry headwinds were only intensified by the pandemic. Seeking protection to facilitate an efficient sale of the business is the best next step for the Company to achieve its goals, over any other alternative,” he added.
The company will continue to examine reopening stores that have been temporarily closed due to COVID-19, and as local and state public health and government officials allow and as it is economical to do so.
Prior to the petition date, on account of the COVID-19 pandemic, the company decided to close 51 Brooks Brothers stores in the United States, and have closed, or are in the process of closing such stores.