Lord & Taylor, one of America’s oldest department stores, has filed for bankruptcy, joining a growing list of stores slammed by the coronavirus pandemic. Tailored Brands, the parent company of Men’s Wearhouse and Jos. A. Banks, filed for bankruptcy as well.
Many of the companies that have filed for Chapter 11 in recent weeks were already struggling, but the forced closure of non-essential stores in March pushed them to the brink.
Lord & Taylor estimated both assets and liabilities in the range of $100 million to $500 million, its filing in the U.S. Bankruptcy Court for the Eastern District of Virginia showed. A storied department store chain founded in 1826, billed as the oldest in the U.S., Lord & Taylor had been exploring other options as well as filing for bankruptcy. Big names that already filed for Chapter 11 include J Crew Group, JC Penney and Neiman Marcus in May, while Lucky Brand became a casualty of the pandemic in July.
Fashion rental service start-up Le Tote acquired Lord & Taylor last year from Saks Fifth Avenue owner Hudson's Bay Company for C$100 million ($74.62 million).
Hudson's Bay had kept ownership of some of Lord & Taylor's real estate and assumed responsibility for its rent payments, amounting to tens of millions of dollars a year.
Reuters reported in May that Lord & Taylor planned to liquidate inventory in its 38 department stores once restrictions to curb the spread of coronavirus were lifted as it braced for a bankruptcy process from which it did not expect to emerge.
One of the world's oldest department store operators, it was founded by two English immigrants on the Lower East Side in New York City. During the U.S. Civil War in the 1860s, it opened a special section offering mourning apparel for widows.
Lord & Taylor opened its flagship store on Manhattan's Fifth Avenue in 1914, and became known for upscale fashion and its holiday window display.
Meanwhile, Men's Wearhouse owner Tailored Brands filed for bankruptcy on Sunday, adding to a list of brick-and-mortar retailers that have succumbed to the economic fallout from the COVID-19 crisis.
The retailer filed for Chapter 11 bankruptcy in the U.S. Bankruptcy Court for the Southern District of Texas, according to a court filing.
Apparel retailers have been among the worst hit from the coronavirus crisis as their businesses were considered non-essential and their stores had to be closed. They were forced to limit operations to online, which led to furloughing of staff and unpaid leases and rents.
Tailored Brands said in a statement that it has entered into a restructuring agreement with more than 75% of its senior lenders, and that could reduce the company's debt by at least $630 million.
The company said it has received commitments for $500 million in debtor-in-possession financing from its existing lenders.
In the court filing, the company listed both its assets and liabilities in the range of $1 billion to $10 billion.
The Houston, Texas-based retailer, which was already struggling with competition from fast-fashion brands and a shift to online shopping before the pandemic, said it will continue to build on its previously announced plans to reduce its corporate workforce by 20% and shut as many as 500 stores.
The company added that Men's Wearhouse, Jos. A. Bank, Moores Clothing for Men and K&G Fashion Superstore will continue to serve its customers.
Last week, the retailer raised doubts about its ability to continue as a going concern within a year due to reduction in liquidity and failure to make an interest payment.
This report uses material from the AP and Reuters.
© 2022 Newsmax Finance. All rights reserved.