It’s been another eventful week in the ongoing saga of retail bankruptcies exacerbated by the devastating effects of the COVID-19 pandemic on consumers’ shopping and spending habits.
Tailored Brands, parent of the Jos. A Bank and Men’s Wearhouse chains, plans to put a greater emphasis on casual apparel as part of its Chapter 11 filing, while the investment group REV is planning to snatch up assets from both Pier 1 and Modell’s out of bankruptcy court.
Tailored Brands, which filed for bankruptcy protection on Aug. 2, will receive $500 million in debtor-in-financing assistance from current lenders, and is seeking to reduce its debt by $630 million. According to the Wall Street Journal, the company also plans to step up sales of more casual men’s clothing as demand for tailored suits has plummeted.
The company’s 1,450 retail stores in the U.S., which also include the Moores Clothing for Men and K&G Fashion Superstore brands, will remain open during the bankruptcy process.
“As evidenced by the positive results we saw in January and February, we have made significant progress in refining our assortments, strengthening our omnichannel offering and evolving our marketing channel and creative mix,” said Tailored Brands President and CEO Dinesh Lathi in a release. “However, the unprecedented impact of COVID-19 requires us to further adapt and evolve.
Reaching a deal with lenders “represents a critical milestone toward our goal of becoming a stronger company that has the financial and operational flexibility to compete and win in the rapidly evolving retail environment,” Lathi added.
In other news, entrepreneurs Alex Mehr and Tai Lopez, who run Retail Ecommerce Ventures (REV) have entered a “stalking horse” or starting bid of $1.96 million for the online and intellectual property assets of Modell’s out of bankruptcy court. The partnership acquired the assets of Dress Barn in 2019, and recently closed on a $31 million acquisition of the assets of Pier 1 Imports, besting an offer from Sycamore Partners.
Modell’s originally planned its filing for March but was delayed due to the effects of the coronavirus outbreak. A judge restarted the process in June and hearings are scheduled for Aug. 29.
Other retail properties snapped up by REV’s brick-to-click “white knight” model include dating site Zoosk – which Mehr founded and later sold – Linens n Things and Franklin Mint.