Brooks Brothers Group files Chapter 11 bankruptcy, plans sale process

By Caroline Salls

Pittsburgh, July 8 – Brooks Brothers Group, Inc. filed Chapter 11 bankruptcy Wednesday in the U.S. Bankruptcy Court for the District of Delaware to facilitate a value-maximizing sale process, according to a company news release.

The company said a sale transaction would ensure that the Brooks Brothers brand is positioned to continue serving its customers for years to come.

“Our priority is to start this important chapter with a new owner that has appreciation for the Brooks Brothers legacy, a vision for its future and aligns with our core values and culture,” chairman and chief executive officer Claudio Del Vecchio said in the release.

“Prior to Covid-19, we were already conducting an evaluation of various strategic options to position the company for future success in a rapidly transforming retail environment, including a potential sale of the business. Industry headwinds were only intensified by the pandemic.”

Brooks Brothers said timing details for its court-supervised auction process will be made available in the coming days, and the company expects to complete the sale process in the next few months, pending court approval.

The company said it will continue to operate its business in the ordinary course throughout the court and sale process, and will continue to examine reopening stores that have been temporarily closed as a result of the pandemic.

Before the bankruptcy filing date, Brooks Brothers said it decided, on account of the Covid-19 pandemic, to close 51 Brooks Brothers stores in the United States, and has closed, or is in the process of closing those stores.

In conjunction with the bankruptcy filing, Brooks Brothers obtained a commitment for $76 million in debtor-in-possession financing from WHP Global.

The DIP financing terms had not yet been filed as of late Wednesday morning.

According to court documents, Brooks Brothers has $500 million to $1 billion in both assets and debt.

The company’s largest unsecured creditors are Swiss Garments Co. of 10th of Ramadan, Egypt, with a $5.23 million trade claim; FedEx ERS of Pittsburgh, with a $2.94 million trade claim; Teacher’s Insurance of San Francisco, with a $2.86 million lease obligation claim; Trajes Mexicanos SA de CV of Tianguistenco, Mexico, with a $2.84 million trade claim; Esquel Enterprises Ltd. of Wahchai, Hong Kong, with a $2.55 million trade claim; Unagaran Sari Garments of Kabupaten Semarang, Indonesia, with a $1.96 million trade claim; Grosvenor Urban Retail LP of Philadelphia, with a $1.19 million lease obligation claim; T.U.W. Textile Co., Ltd. of Nakornprathom, Thailand, with a $1.19 million trade claim; Adventura Mall Venture of Orlando, Fla., with a $1.11 million lease obligation claim; and Epic Designers Ltd. of Kowloon, Hong Kong, with a $1.07 million trade claim.

The company’s restructuring counsel is Weil, Gotshal, & Manges LLP, its restructuring adviser is Ankura Consulting Group, and its financial adviser is PJ Solomon LP.

Brooks Brothers is an apparel retailer based in New York City. The Chapter 11 case number is 20-11785.

© 2015 Prospect News.
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