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Iconic Brands Plunge into Bankruptcy

ORIGINAL POST
Posted by Ed 4 yrs ago
Pandemic Compresses Brick & Mortar Meltdown: Brooks Brothers Files for Bankruptcy, Ascena (Ann Taylor, etc.) Prepares to File, Tailored Brands (Men’s Wearhouse, etc.) Not Far Behind

A dozen major brands, thousands of stores, after years of struggling. Work-from-home is annihilating casual and formal office attire.
 
 
The brick-and-mortar retailer bankruptcy plot continues to progress relentlessly. Today, it’s Brooks Brothers, the oldest men’s clothier in the US that also diversified over the decades into women’s attire, sportswear for college kids, and the like.
 
Owned and run by Claudio Del Vecchio – often labeled “billionaire” whose dad founded Italian eyeglass maker Luxottica – Brooks Brothers filed for Chapter 11 bankruptcy in Delaware on Wednesday.
 

Brooks Brothers has around 500 stores globally and 200 remaining stores in North America. Unlike other American brands that have off-shored all manufacturing of clothing to cheap-labor countries decades ago, Brooks Brothers has continued to operate three plants in the US that make suits, ties, and shirts, accounting for about 7% of its sales. The rest of its merchandise is manufactured in cheap-labor countries.

 

Brooks Brothers, like other retailers, has been caught up in the brick-and-mortar meltdown. It has tried to get on the bandwagon, and about a quarter of revenues are from ecommerce – but that’s not helpful for its expensive-to-operate stores.

In addition, it has gotten hammered by the years-long structural shift away from its costly suits to casual office attire, where it competes with everyone out there.
 
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COMMENTS
Ed 4 yrs ago
Retail Apocalypse Accelerates - 8,700 Stores Closing, Number Set To Rise
 
The list of store closings is already very long and may be much longer by the end of the year. The coronavirus pandemic has left many companies in horrible shape. Some have had to declare bankruptcy while others have closed some of their units.
 
Many employees have not been recalled to work as the pandemic has raged on, and there has been a paucity of customers since they are scared they might contract the virus.
Debt is now the common enemy. Every retailer who had high debt before all of this started is closing some stores and cutting back on new projects. At a time like this, ability to raise cash and to maintain a semblance of free cash flow is quite difficult even as it is invaluable and enviable for most retailers.
 
Many have had to rely on more borrowing to sustain their business. It has left their future uncertain.
 
We are witnessing a retail apocalypse. 
 
Store closures in 2020 (America):

Brooks Brothers: 51 Stores (bankruptcy)

Chuck E Cheese: 54 U.S. stores (bankruptcy)

Destination Maternity: 90 stores (bankruptcy)

GNC: 1,200 stores (bankruptcy)

J. Crew: 54 stores (bankruptcy)

JCPenney JCP -4%: 154 stores (bankruptcy)

K-Mart: 45 stores (bankruptcy)

Modell’s Sporting Goods: 153 stores (bankruptcy)

Neiman Marcus (Last Call): 20 stores (bankruptcy)

Papyrus: 254 stores (bankruptcy)

Pier 1 Imports PIR -11.8%: 936 stores (bankruptcy)

Sears: 51 stores (bankruptcy)

Signet Jewelers SIG +5.8%: 232 stores

Stage Stores: 738 stores (liquidating)

Tuesday Morning: 230 stores (bankruptcy)

***

AC Moore: 145 stores

Art Van Furniture: 190 stores

AT&T: 250 stores

Bath & Body Works: 50 stores

Bed Bath & Beyond: 44 stores

Bloomingdale’s: 1 store

Bose: 11 stores

Chico: 100 stores (estimated)

Children’s Place: 200 stores

Christopher Banks: 30-40 stores

CVS Pharmacy: 22 stores

Earth Fare: 50 stores

Express: 66 stories

Forever 21: 15 stores (estimated)

GameStop GME +4.2%: 320 stores

Gap: 230 stores

Guess: 100 stores

Hallmark: 16 stores

Lord & Taylor: 30 or 40 stores

Lowe’s Canada: 34 stores

Lucky Market: 32 stores

Macy’s M +4.6%: 125 stores (over 3 years)

Microsoft: 77 stores

New York & Co: 27 stores

Nordstrom: 16 stores

Office Depot: 90 stores

Olympia Sports: 76 stores

Party City: 21 stores

Starbucks SBUX -0.1%: 400 stores (over 18 months)

Victoria’s Secret: 250 stores

Walgreen: 100 stores (estimated)

Walmart: 2 stores

Wilson Leather & G.H. Bass: 199 stores

Zara: 1,000 stores worldwide (over 2 years)
 
 
 
 
Well, air traffic is operating at around 10-15% of normal on domestic routes (and near 0 internationally), oil consumption has plummeted, and people are not buying much unneeded 'stuff'  which is great for the environment.   
 
There is a slight hitch in that hundreds of millions of people have no work and no income.  The lucky ones are being paid wage subsidies.
 
Be careful what you wish for..... 
 
 
 

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Ed 4 yrs ago
The latest and largest coronavirus Chapter 11 filings 
 
Sur La Table became the latest retailer to fall victim during the pandemic, announcing Thursday it had filed for bankruptcy and had a buyout offer from Fortress Investment Group LLC.
 
The chain plans to sell 70 stores to Fortress, close another 51, and keep operating cooking classes and its web business. A day earlier, preppy retailer Brooks Brothers, founded in 1818, also filed for bankruptcy.
 

“We are seeing an acceleration in bankruptcies that is unprecedented,” said James Hammond, CEO of New Generation Research, which runs BankruptcyData. For 2020, he says, “I’m pretty confident we will see more bankruptcies than in any businessperson’s lifetime.”
 

Ranked by assets alone, says Hammond, the magnitude of bankruptcies this year has already surpassed that of 2008. And that’s not including what could happen when the government’s Paycheck Protection Program, which aims to keep small businesses up and running with loans that can be converted to grants if certain terms are met, runs out.
 

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