NEW YORK CITY — July 8, 2020 — Brooks Brothers, America’s oldest apparel company, today announced that it has commenced Chapter 11 cases in the United States Bankruptcy Court for the District of Delaware to facilitate a value-maximizing sale process. A transaction would ensure that the iconic Brooks Brothers brand is positioned to continue serving its loyal customers for years to come.
The company has also secured commitments for a debtor-in-possession (DIP) financing facility of $75 million from WHP Global, a brand management firm, subject to court approval. This capital, together with cash flows from ongoing operations, will provide liquidity to support the company through the sale process. This includes honoring certain employee-related wages and benefits obligations, paying claims of certain critical vendors and suppliers, and ensuring the continuation of other operations in the ordinary course of business with as minimal interruption as possible.
“For over 200 years, Brooks Brothers has remained resilient, navigating evolving fashion trends, fluctuating economic cycles, and even world wars,” said Claudio Del Vecchio, chairman and CEO. “Our long history is a testament to the strength of our brand and our mission since 1818: serving customers through innovation, fine quality, personal service, and exceptional value.”
Del Vecchio continued: “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. 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. Seeking protection to facilitate an efficient sale of the business is the best next step for the Company to achieve its goals, over any other alternative.”
Details on the Sale Process
The company will commence a competitive auction where parties can submit qualified bids. Timing details for the process will be made available in the coming days.
Brooks Brothers expects to complete the sale process in the next few months, pending court approval.
Brooks Brothers will continue to operate its business in the ordinary course throughout the court and sale process.
Omnichannel Business Update
The company will continue to examine reopening stores that have been temporarily closed due to COVID-19, and as local and state public health and government officials allow and as it is economical to do so.
Prior to the petition date, on account of the COVID-19 pandemic, the company decided to close approximately 51 Brooks Brothers stores in the United States, and have closed, or are in the process of closing such stores.
Details on the store closures can be found in the company’s first day motions, filed publicly with the court.
Information on the DIP Lender
WHP Global is a New York City-based firm that owns and develops global consumer brands. The firm strategically invests in high-growth distribution channels, digital commerce platforms, and global expansion. WHP Global owns the ANNE KLEIN and JOSEPH ABBOUD brands. For more information, please visit www.whp-global.com.
The company’s restructuring counsel is Weil, Gotshal, & Manges LLP, its restructuring advisor is Ankura Consulting Group and its financial advisor is PJ Solomon L.P.
Posted July 9, 2020
Source: Brooks Brothers