Moody's lowers Men's Wearhouse

Moody's Investors Service said it downgraded the Men's Wearhouse, Inc. ratings, including its corporate family rating to B3 from Ba3, probability of default rating to B3-PD from Ba3-PD, secured term loan rating to B3 from Ba3 and unsecured note rating to Caa2 from B2. The company's speculative grade liquidity rating was also downgraded to SGL-3 from SGL-2. All long term ratings are on review for further downgrade. Men's Wearhouse is a subsidiary of Tailored Brands, Inc.

The downgrade reflects Tailored Brands' weak operating performance and credit metrics in 2019 and Moody's expectation for further significant declines in 2020 due to the effect of the coronavirus, including temporary store and e-commerce fulfillment center closures and an anticipated decline in consumer spending.

In an effort to strengthen liquidity, the Company drew down $260 million under its $550 million ABL revolving credit facility in addition to taking action to reduce expenses and defer capital expenditures and inventory purchases to preserve cash and liquidity.

As of March 18, the company had nearly $400 million of balance sheet cash, including $100 million of restricted cash related to the recent sale of the Joseph Abboud trademarks. On March 19, 2020, the company announced it borrowed an additional $25 million under the ABL.

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