The privately held firm had been struggling as enterprise apparel grew extra informal lately. Nevertheless it has been decimated by the coronavirus pandemic, which despatched demand for fits plummeting. Many working-from-home staff opted for a lot extra relaxed seems to be of T-shirts and sweatpants fairly than pinstripe fits and customized shirts.
“Though the pandemic has severely eroded the outlook for the enterprise, Brooks Brothers has lengthy suffered from a failure to decisively adapt to altering developments,” mentioned Neil Saunders, the managing director of GlobalData Retail. “With regards to tastes and elegance, Brooks Brothers has been swimming towards the tide.”
The corporate has been evaluating varied strategic choices, together with a possible sale. Nevertheless it has struggled to discover a purchaser. An organization spokesperson advised CNN Enterprise that it expects to “full the sale course of throughout the subsequent few months.”
The retailer is within the means of shuttering 20% of its 250 US shops. In line with the chapter submitting, Brooks Brothers has secured $75 million in financing to proceed working.
“The aim of this submitting is to acquire further financing and facilitate a sale course of in an environment friendly method to maximise worth for our stakeholders and be sure that our iconic model is positioned to proceed underneath new possession,” an organization spokesperson mentioned.
A two-century historical past
Brooks Brothers opened its first retailer in 1818 close to Wall Avenue. Years later, it started making ready-made fits for males that could not watch for a tailor. In 1896, the retailer invented the unique button-down polo shirt and has provided many different first of its form clothes, together with the madras prints and the chunky shetland sweater.
Nonetheless, Brooks Brothers maintained a decidedly formal and old-school strategy to clothes design that proved out of step with youthful customers in search of an edgier look, Saunders famous.
Brooks Brothers stays one of many final main retailers to make all of its merchandise in the US. However that’s underneath risk too. Del Vecchio advised the New York Instances final month that its American factories “by no means made cash” and deliberate to maneuver some operations abroad to protect money.
The pandemic hit Brooks Brothers particularly exhausting as a result of some staff have been compelled to earn a living from home, eliminating the necessity for brand spanking new fits and dressier garments.
GlobalData Retail mentioned in a be aware Wednesday that year-over-year gross sales of males’s formal clothes fell by 74% between April and June.
“Whereas this deterioration will ease over time, demand will stay suppressed for the remainder of 2020 and properly into 2021 as workplace working, enterprise conferences, and socializing are all lowered,” wrote Saunders. “This leaves Brooks Brothers very uncovered to a depressed market.”