Two more retailers have joined the growing list of retail casualties from the pandemic this week.
Lord & Taylor, one of America’s oldest department stores, and its owner rental clothing company Le Tote, have filed for Chapter 11. Tailored Brands, the parent company of Men’s Wearhouse and Jos. A. Banks, filed for bankruptcy as well.
The retailers join a growing list of large retailers that have filed for bankruptcy during the COVID-19 pandemic, including JCPenney, which is looking to sell the business; RTW Retailwinds, the parent company to New York & Company; Lucky Brand; GNC; Off-price retailer Tuesday Morning Corp., department store retailer Neiman Marcus Group; and fashion retailer J Crew Group.
Le Tote bought Lord & Taylor from Hudson's Bay Co. for $100 million less than a year ago. Now Le Tote and the nearly 200-year-old department store have filed for Chapter 11 bankruptcy protection “to overcome the unprecedented strain the COVID-19 pandemic has placed on our business,” Lord & Taylor stated on its website. The retailer also noted it is searching for a new owner “who believes in our legacy and values.”
Lord & Taylor said there are no immediate changes to the retailer’s e-commerce site and it continues to make progress reopening its stores, which were temporarily closed in March at the start of the pandemic.
Meanwhile, Tailored Brands has filed for Chapter 11 bankruptcy protection as well. The move came after the Men’s Wearhouse and Jos. A. Banks owner said last month it had identified up to 500 stores for closure “over time” and plans to eliminate around 20% of its corporate positions by the end of its fiscal Q2.
“Unfortunately, due to the COVID-19 pandemic and its significant impact on our business, further actions are needed to help us strengthen our financial position so we can navigate our current realities,” Tailored Brands president and CEO Dinesh Lathi said at the time.
On Sunday, Tailored Brands announced that it has entered into a restructuring agreement with more than 75% of its senior lenders that is expected to reduce the company’s funded debt by at least $630 million and provide increased financial flexibility. To implement the terms of the restructuring, the retailer filed voluntary Chapter 11, but expects that its four retail brands, Men’s Wearhouse, Jos A. Bank, Moores Clothing for Men and K&G Fashion Superstore, will continue to operate. This includes paying employees as usual and continuing pre-existing employee health and welfare benefits, maintaining existing loyalty programs, and honoring customer gift cards, rental reservations and custom clothing orders.
The company said it has received commitments for $500 million in debtor-in-possession financing from its existing lenders.
“As evidenced by the positive results we saw in January and February, we have made significant progress in refining our assortments, strengthening our omnichannel offering and evolving our marketing channel and creative mix,” Lathi said in the announcement. “However, 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.”