(Reuters) – Men’s Wearhouse owner Tailored Brands filed for bankruptcy on Sunday, adding to a list of brick-and-mortar retailers that have succumbed to the economic fallout from the COVID-19 crisis.
The retailer filed for Chapter 11 bankruptcy in the U.S. Bankruptcy Court for the Southern District of Texas, according to a court filing.
Apparel retailers have been among the worst hit from the coronavirus crisis as their businesses were considered non-essential and their stores had to be closed. They were forced to limit operations to online, which led to furloughing of staff and unpaid leases and rents.
Tailored Brands said in a statement that it has entered into a restructuring agreement with more than 75% of its senior lenders, and that could reduce the company’s debt by at least $630 million.
The company said it has received commitments for $500 million in debtor-in-possession financing from its existing lenders.
In the court filing, the company listed both its assets and liabilities in the range of $1 billion to $10 billion.
The Houston, Texas-based retailer, which was already struggling with competition from fast-fashion brands and a shift to online shopping before the pandemic, said it will continue to build on its previously announced plans to reduce its corporate workforce by 20% and shut as many as 500 stores.
The company added that Men’s Wearhouse, Jos. A. Bank, Moores Clothing for Men and K&G Fashion Superstore will continue to serve its customers.
Last week, the retailer raised doubts about its ability to continue as a going concern within a year due to reduction in liquidity and failure to make an interest payment.
Lord & Taylor, a storied department store chain founded in 1826, billed as the oldest in the United States, also filed for Chapter 11 bankruptcy on Sunday.
(Reporting by Sabahatjahan Contractor in Bengaluru; Editing by Aditya Soni and Sherry Jacob-Phillips)