WASHINGTON (CN) — A year after the retailer raked in nearly $1 billion in sales, Brooks Brothers ended a 200-year run at the top of the menswear market by filing for Chapter 11 bankruptcy protection Wednesday.
Branding itself an “American icon,” Brooks Brothers has been one of the nation’s oldest names in luxury apparel since its New York City founding in 1818. Coupled with increasingly high rent for its brick-and-mortar stores, however, the retailer proved unable to withstand the downturn in business brought on by the Covid-19 pandemic.
Shutdowns of nonessential business across the country prompted the company to temporarily close nearly all of its North American stores and furlough the bulk of its staff earlier this year.
Brooks Brothers employs some 4,000 people with 500 stores around the globe, about half of which are in North America. Following an internal review of the company’s assets in April, the retailer says it decided to close 51 U.S. locations. Some of those stores are already closed, but for others it is a work in progress. The company anticipates closing at least three factories later this summer in New York, Massachusetts and North Carolina.
The novel coronavirus has badly hurt businesses across America in the last four months. With its bankruptcy, Brooks Brothers follows in the footsteps of prompting other floundering companies like J.C. Penney, Neiman Marcus, J. Crew, Hertz and Pier 1 Imports.
“Over the past year, Brooks Brothers’ board, leadership team and financial and legal advisors have been evaluating various strategic options to position the company for future success, including a potential sale of the business,” a spokesperson for the clothier said Wednesday.
The retailer’s bankruptcy follows separate a $20 million secured loan in May from Gordon Brothers, a Massachusetts-based restructuring and investment group.
To stay afloat for now, Brooks Brothers said it has obtained a $75 million line of financing from the capital-management and brand-acquisition firm WHP Global.
The company filed for bankruptcy in Delaware, listing about $500 million in assets and the same in liabilities.
The luxury clothing brand says it has outfitted nearly every U.S. president, including Abraham Lincoln, who was wearing a Brooks Brother frock when he was assassinated. Presidents like Ulysses Grant and Theodore Roosevelt also wore the garments to their inaugurations.