Brooks Brothers, the retailer known for dressing the great and good of the United States since 1818, filed for bankruptcy on Wednesday, buckling under the pressure from the coronavirus pandemic after years of faltering sales as customers embraced more casual apparel and sales shifted online, The New York Times reported.
The company, founded and based in New York, filed for Chapter 11 restructuring proceedings in the US Bankruptcy Court for the District of Delaware. Claudio Del Vecchio, the Italian industrialist who bought the brand in 2001 and still owns the company, told The Times in May that he would not rule out Chapter 11 as a possibility.
Brooks Brothers said in an emailed statement on Wednesday that the filing would allow it to obtain additional financing as it facilitated a sale.
The bankruptcy is the latest high-profile retail fall during the pandemic, which has caused widespread store closures and sales declines, reshaping the shopping streets of cities across the country. Since May, major names like J.C. Penney, Neiman Marcus and J. Crew have all been pushed into Chapter 11 proceedings. The chains, including Brooks Brothers, plan to keep operating, though most likely in a pared-back fashion.
“Brooks Brothers is the most iconic American brand,” said William Susman, managing director at Threadstone Advisors. “While in a different form, I am confident the brand will survive and continue for years to come. This is a case of a failed company, not a failed brand.”
Brooks Brothers, known for its suits and preppy clothes, has been hit especially hard by the virus crisis. It is an era of remote work and job interviews through Zoom, and the postponement of celebrations like weddings, bar mitzvahs and graduations.
The company, which is the oldest apparel brand in continuous operation in the United States, said it had decided to close 51 US stores out of its roughly 250 locations in North America. Earlier this year, Brooks Brothers said it would close its three factories in the United States — in Queens; Haverhill, Mass.; and Garland, N.C. — spurring concern about the future of the brand and its identity as a “Made in America” name.
It is currently facing a dispute in Haverhill, where a union representative for 400 workers said the company was refusing to pay severance to employees, some of whom have worked there for decades.
Brooks Brothers has a unique and rich connection to American heritage and culture. It has dressed all but four US presidents, and its overcoats have been worn for the inaugurations of Abraham Lincoln, Barack Obama and Donald J. Trump, among others. It has outfitted Clark Gable, Andy Warhol and Stephen Colbert. Even Ralph Lauren started out as a salesman at Brooks Brothers in New York.
For decades, the brand was synonymous with professional American men’s wear, its somewhat boxy suits framed as a less fashion-centric riposte to the more structured English tailoring and the more showy Italian style. Preppy, pinstriped, and red, white and blue, its clothes, for both men and women, were symbols of what became known as “Ivy League style.” It personified East Coast success in the Kennedy vein, and its Madison Avenue flagship, a limestone Italian Renaissance building, became a pit stop for commuters hopping the train from Grand Central to family life in the suburbs.
“It’s the most historical and storied men’s wear institution we’ve had in this country,” said Alan Flusser, a tailor and the author of numerous books on men’s style. However, he added, “for many years it has been more a memory than a reality in terms of its ability to influence or inspire people.”
The Times reported last month that Del Vecchio had hired PJ Solomon, the investment banking firm, as long ago as last year to explore “options” such as a sale or further investment. A restructuring plan was created before the pandemic, and this year, a group of potential investors valued the company between $300 million and $350 million. But Del Vecchio told The Times that he had not felt that the discussions “matched the needs we saw.”
Del Vecchio also said that annual sales from 2017 through 2019 were effectively flat at about $1 billion and that the company had a debt of “less than” $300 million.
Union representatives at the Haverhill factory, which is Brooks Brothers’ largest in the United States, said the company denied requests on Tuesday for severance payments based on years of service and other benefits after the facility’s closure later this month, leaving the workforce stunned. The Wednesday filing is another blow to the employees, as bankruptcy proceedings often leave little for workers.