Brooks Brothers, the 200-year-old New York tailor that boasted of dressing 40 US presidents, has filed for bankruptcy as suit sales are killed off by dress-down Fridays and homeworking amid the coronavirus pandemic.
The iconic menswear brand has become the latest casualty of the global health crisis - as the shift to working from home has led to a fall in demand for smart clothing while stay-at-home orders and dwindling consumer confidence have ravaged retail industry sales on a whole.
Despite its famous past, with President Abraham Lincoln wearing a Brooks Brothers suit when he was assassinated in 1865 and the suitmaker being a firm favorite for JFK, the heritage brand is now struggling to pull in the fans.
The retailer, which has more than 500 stores worldwide and employs 4,025 people, filed for Chapter 11 bankruptcy early Wednesday in a Delaware court as it seeks a buyer to save the ailing business.
'During this strategic review, Covid-19 became immensely disruptive and took a toll on our business,' the company said in a statement.
'The purpose of this filing is to obtain additional financing and facilitate a sale process in an efficient manner to maximize value for our stakeholders and ensure that our iconic brand is positioned to continue under new ownership.'
Brooks Brothers, the 200-year-old New York tailor that boasted of dressing 40 US presidents, has filed for bankruptcy after the coronavirus pandemic hammered its sales
According to the filing, the brand has secured $75 million in financing to continue operating while it waits for a buyer.
'Over the past year, Brooks Brothers' board, leadership team, and financial and legal advisors have been evaluating various strategic options to position the company for future success, including a potential sale of the business,' a spokesperson for the retailer said Wednesday.
'We are in the process of identifying the right owner, or owners, to lead our iconic Brooks Brothers brand into the future.
'It is critical that any potential buyer aligns with our core values, culture, and ambitions. Further details on the sale process will be made available in the coming days.'
This comes as executives embarked on a strategy back in April to start shrinking its 250-strong North American store count by 20 percent.
A total of 51 stores have already been selected to close and many of these closures have begun, with inventory moved from the sites into distribution centers.
Then in June, the company revealed plans to lay off almost 700 workers across three states.
The iconic menswear brand has become the latest casualty of the global health crisis - as the shift to homeworking has led to a fall in demand for suits while stay-at-home orders and dwindling consumer confidence has ravaged retail industry sales on a whole. Pictured some classic Brooks Brothers suits
Despite its famous past, with President Abraham Lincoln wearing a Brooks Brothers suit when he was assassinated in 1865 (artist's drawing on left) and the suitmaker being a firm favorite for JFK (pictured wearing the brand on right), the heritage brand is now struggling to pull in the fans
MG star Clark Cable regularly wore Brooks Brothers' suits (pictured in one above)
Brooks Brothers has survived two world wars and the Great Depression but the pandemic has pushed it to the brink as a suit has fallen to the very bottom of shopping lists.
Smart office wear has fallen out of favor as offices shuttered and white-collar workers started working remotely and swapping suits for tracksuits - a trend that many feel will last into the future.
This has sent sales of smart clothing tumbling, with year-over-year sales of men's formal clothing plunging by a staggering 74 percent between April and June, according to GlobalData Retail.
However, even before the pandemic took its toll on the business, retail experts said Brooks Brothers has struggled to adapt to changing customer demands and grapple with its huge store portfolio.
'Although the pandemic has severely eroded the outlook for the business, Brooks Brothers has long suffered from a failure to decisively adapt to changing trends,' Neil Saunders, the managing director of GlobalData Retail, told CNN Business.
'When it comes to tastes and style, Brooks Brothers has been swimming against the tide.'
Business wear has become more casual over the years, thanks to Silicon Valley techies popularising the trend to wear jeans and t-shirts to the workplace.
The company's failure to keep up with this trend has been exacerbated further by the shift to homeworking amid the pandemic.
Brooks Brothers has been a stalwart of the smart apparel industry ever since it opened its first store near Wall Street back in 1818, making it the country's oldest clothing retailer. A sketch of a New York store in 1897
Brooks Brothers boarded up in Long Island amid protests across America in June. The retailer, which has more than 500 stores worldwide and employs 4,025 people, filed for Chapter 11 bankruptcy early Wednesday in a Delaware court as it seeks a buyer to save the ailing business
The business changed hands to its current owner Claudio Del Vecchio in 2001 (left), who bought it from Marks and Spencer for $225 million
The company's commitment to US manufacturing has also come at a cost, with CEO and owner Claudio Del Vecchio admitting last month that its American factories 'never made money' leaving him with no choice but to shift some production to cheaper locations overseas.
'While this deterioration will ease over time, demand will remain suppressed for the rest of 2020 and well into 2021 as office working, business meetings, and socializing are all reduced,' Saunders told CNN Business.
'This leaves Brooks Brothers very exposed to a depressed market.'
Brooks Brothers has been a stalwart of the smart apparel industry ever since it opened its first store near Wall Street back in 1818, making it the country's oldest clothing retailer.
Its influence can be seen across the globe, from its invention of the original button-down polo shirt to it becoming synonymous as the unofficial wardrobe choice of Wall Street bankers.
The company has a storied history, dressing at least 40 American presidents, including Abraham Lincoln, who was wearing a Brooks Brothers coat when he was assassinated in 1865.
Brooks Brothers' two-button suits were a favorite of President John F. Kennedy.
But it's cultural influence has been broad.
Clark Cable wore Brooks Brothers and Jennifer Aniston appeared on the cover of GQ magazine wearing nothing but a red, white and blue Brooks Brothers tie.
The company continues to be one of the last major retailers to manufacture all of its products domestically on US soil - meaning Wednesday's filing marks a dark day for the retail industry.
Brooks Brothers is just the latest in a string of major retailers to go bust as a result of the pandemic.
J.Crew, Neiman Marcus, JCPenney have all filed for bankruptcy in recent months.
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