Brooks Brothers files for bankruptcy

Storied retailer has secured financial lifelines as it seeks sale

National /
Jul.July 08, 2020 10:05 AM
Brooks Brothers CEO Claudio Del Vecchio (Getty)

Brooks Brothers CEO Claudio Del Vecchio (Getty)

Brooks Brothers, which has 500 stores across the globe, filed for Chapter 11 bankruptcy protection Wednesday. The move had been expected as the 200-year-old clothing chain struggled first with a shift from a formal dress code in the workplace to a more casual one, and then ultimately the coronavirus.

Brooks Brothers will use the bankruptcy process to find a buyer for the business, the Wall Street Journal reported. The company has a $75 million debtor-in-possession loan from WHP Global, which gives the lender a senior lien on Brooks Brothers’ assets, according to the newspaper.

WHP Global is a brand-management firm backed by Oaktree Capital and BlackRock – two private equity firms that have large war chests to buy distressed companies in the wake of the virus pandemic.

Brooks also received a $20 million loan from inventory liquidator Gordon Brothers. The loan, however, is from Gordon’s financing arm – a separate division from the side that handles liquidations, according to the Journal.

Brooks Brothers listed assets and liabilities between $500 million and $1 billion.

The closely held company is owned by Italian businessman Claudio Del Vecchio, who bought the company in 2001 and oversaw an expansion from one international market to a presence in 70 countries today. The company has about 200 stores in North America and three U.S. factories. It warned employees in June that it could shut those factories down.

Potential suitors include the brand manager Authentic Brands Group, which is teaming up with Simon Property Group in an attempt to buy the retailer. [WSJ] — Rich Bockmann

 

Related Articles

arrow_forward_ios
Anita Durst and images of Chashama (Photos via Getty, Chashama)
Durst-backed nonprofit puts startups into empty storefronts
Durst-backed nonprofit puts startups into empty storefronts
Washington Prime Group CEO Lou Conforti (Twitter)
Washington Prime Group files for Chapter 11 bankruptcy
Washington Prime Group files for Chapter 11 bankruptcy
Hamed bin Zayed Al Nahyan (Getty)
Pandemic squeeze forces Abu Dhabi fund to reassess real estate exposure
Pandemic squeeze forces Abu Dhabi fund to reassess real estate exposure
Katerra facility (Katerra, Getty)
Katerra employees fire back with lawsuit over abrupt closure
Katerra employees fire back with lawsuit over abrupt closure
Camber Property Group Principals Andrew Moelis and Rick Gropper with 440 West 41st Street (Caro Enterprises, Inc.)
Camber Property buys bankrupt Hell’s Kitchen building for $40M
Camber Property buys bankrupt Hell’s Kitchen building for $40M
546 Broadway and Isaac Chetrit (Google Maps)
Uniqlo finalizes $160M buy of its flagship at 546 Broadway
Uniqlo finalizes $160M buy of its flagship at 546 Broadway
Softbank CEO Masayoshi Son (Getty, Katerra, iStock)
Katerra files for bankruptcy
Katerra files for bankruptcy
Sam Nazarian (Getty)
Sam Nazarian’s food venture expands to Saudi Arabia in $100M JV
Sam Nazarian’s food venture expands to Saudi Arabia in $100M JV
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...