Bankrupt Brooks Brothers Agrees to Sale to Simon Property and Authentic Brands

Brooks Brothers, based in New York, is the oldest apparel brand in continuous operation in the United States, and has a rare and storied reputation. It has dressed all but four presidents dating to James Madison, has been worn by Clark Gable and Andy Warhol and is the official clothier of the Jazz at Lincoln Center Orchestra. Abraham Lincoln was wearing a Brooks Brothers coat the night he was assassinated.

It was revived in the past two decades by the Italian industrialist Claudio Del Vecchio, who bought it in 2001. The retailer started to slip in recent years, battered by the rise of more casual workplace attire and the shift to online retail, prompting a search for new buyers or investors. Brooks Brothers said in court documents that since April 2019, its business had been marketed to more than 90 potential investors around the world. The retailer said that its revenue exceeded $991 million for the fiscal year that ended 2019, with about one-fifth of that coming from its North America e-commerce business.

The pandemic dealt a new and unexpected blow to Brooks Brothers, given its pricey, formal merchandise and reliance on physical retail. Not only were its stores temporarily closed, but so were the offices of many of its customers. Proms, weddings, graduations, bar mitzvahs and other special occasions fell off calendars. On Zoom, sweatpants cannot be distinguished from tailored dress pants.

The level of distress at Brooks Brothers came into sharper focus this year when the company prepared to close its three U.S. factories, in Massachusetts, New York and North Carolina, forgoing its “Made in America” calling card, and announcing plans to lay off nearly 700 employees. Like many retailers, it furloughed most of its staff — it had roughly 4,000 employees before the pandemic — and cut the salaries of corporate workers. Before filing for bankruptcy, it had already decided to close 51 Brooks Brothers stores in the United States.

If it is approved, the acquisition by the SPARC Group will have proceeded remarkably quickly, given that Brooks Brothers filed for bankruptcy protection on July 8.

Article source: https://www.nytimes.com/2020/08/12/business/brooks-brothers-sale-authentic-brands.html