Custom brands have revealed that there is a threat of bankruptcy or even suspension of business due to the Covid-19 crisis in the submission on Wednesday night.
“If the effects of the Covid-19 pandemic are long-lasting and we are unable to increase liquidity and / or effectively resolve our debt position, we may be forced to reduce or suspend operations and / or seek protection under applicable bankruptcy laws,” Filing said. The company said it had no comment after the application was filed.
The company suspended rent payments for April and May, when most of its locations were closed. He said he managed to arrange a lease deferral for a significant number of stores, with repayment later, starting in late 2020 to 2021. He also laughed or fired 95% of his 19,000 employees.
But things didn’t go well in 44% of custom-branded stores that reopened in early May. In the week ending June 5, sales at locations open for at least one week fell 65% at Men’s Wearhouse, 78% at Jos Bank A. and 40% at K&G.
In the first fiscal quarter, which ended May 2, sales fell 60%. All stores were closed for about half of the quarter, and network operations were halted for two weeks in March. But custom brands have delayed reporting on their overall results – the Securities and Exchange Commission allows companies to delay reporting during a pandemic.
One reason for the delay is that it measures how much compensation must be written on the value of various assets, including the goodwill it carries in its books – a measure of the value of brands and the company’s reputation. Billing will be a purely accounting move that does not involve money, but could increase the cost of borrowing the money a company needs to get through the crisis.
Custom brands have had $ 201 million in unlimited cash since June 5, but that’s primarily because it cut $ 310 million on existing credit lines during the first quarter. That left him with only $ 89 million to borrow on those lines.
The company has about 1,400 stores in the United States and Canada, and about half of it is under the name Men’s Wearhouse. They are likely to have to close a significant percentage of what happens to his reorganization efforts, Basu said.
“This is a company that has the legs it needs to possibly turn around,” she said. “But tastes and consumer demand will change. They will come out of bankruptcy with a much smaller footprint.”
Zombie aficionado. Typical introvert. General creator. Beer practitioner. Web fan. Music nerd.