On July 8, 2020 Brooks Brothers, the oldest apparel brand in the United States, filed for bankruptcy. This men’s clothing brand based in New York has been around since 1818. Potential buyers are reportedly preparing for a possible bidding war for the company. Time is flying and a lot of sectors are changing in the world. When people put on suits, this used to convey professionalism and seriousness about work. Now, most people’s perspectives have changed and we agree that our dress code has no relationship with our competence at work.
According to Retail Dive, Brooks Brothers began looking for a buyer about a year ago. It is reported that sales in its 500 stores have been flat about a billion dollars since 2017, and before the pandemic it is estimated that the company value was at $300-$350 million. To add salt to injury, sales dropped further during the corona pandemic period. Surprisingly, no one bought clothes from any of its retail shops.
Due to these financial constraints, CEO Claude Del Vecchio is planning to close three factories in three states: Massachusetts, North Carolina, and New York. What is the impact of this? Well, for Massachusetts where they have their largest factory, many people are going to lose their jobs without severance pay. According to the Boston Globe, the union and members of Congress have tried to plead with the company to keep factories open, something that has proved futile.
The good news is that we have investors and bidders like Simon Property Group, Authentic Brands Group, and W. H. P. who will not watch the company fall—something both the Wall Street Journal and Bloomberg call a bidding race. Brooks Brothers was accepting bids through August 5th. One bidder believes the company will survive and generate up to $300 billion within 5 years. This will be three times its current sales.
We hope that things will return to normal after the pandemic. People will still want to put on fancy clothes for weddings, shows, funerals, and other special occasions. Just like all current trends in our culture, for clothing companies, it’s all about what you manufacture and who is buying it.
What do you think about the Brooks Brothers bankruptcy and its future? Let us know down in the comments.
This article originally published on GREY Journal.