Within less than a month, after weeks of temporary store closures that vanquished apparel sales, two major U.S. menswear retailers with divergent consumer bases — Tailored Brands and Brooks Brothers — have both turned to bankruptcy court.
Menswear conglomerate Tailored Brands openly blamed the pandemic, and "the continuing decline in the brick-and-mortar retail industry generally," for its bankruptcy. The recent closures of offices and stores and the cancellation of events can hardly have helped Brooks Brothers, either. But the real challenges for both these retailers have been years in the making, most of them specific to the menswear segment.
Some of the troubles are of the companies' own making. Revenue at Tailored Brands — which runs Men's Wearhouse, Jos. A. Bank, Moores Clothing for Men, K&G and, until January, the Joseph Abboud brand — fell 5.6% over the past two years. The company did itself few favors in ousting Men's Wearhouse founder George Zimmer in 2013, then hotly pursuing Jos. A. Bank against his advice.
That resulted in a $1.4 billion debt pile that left it especially vulnerable to the sales declines during the pandemic. Men's Wearhouse missed a $6.1 million interest payment on bonds in early July. Weeks later, about 500 retail locations were marked for permanent closure across Tailored Brands, about 20% of its corporate workforce would be cut by the end of the second quarter, and the CFO left.
The company "took on a tremendous amount of debt relative to current sales" in order to expand by buying Jos. A Bank, an affordable men's retailer with merchandise that isn't well differentiated from Men's Wearhouse, according to Alan Behr, fashion industry attorney and partner at Phillips Nizer.
"The websites look virtually identical, with the same price point to reach the same customer," Behr said. "And you're going to get into a lot of debt to do that?"
Meanwhile, Brooks Brothers, which has weathered the vagaries of market shifts for two centuries, has been slow to adjust to what are emerging as enduring trends, according to Tom Ott, formerly general merchandise manager for men's at Saks Fifth Avenue, and founder of retail consultancy Retail and Fashion Solutions.
"Brooks Brothers has a wonderful name and great heritage but it was too classic," Ott said. "There's been dramatic growth in streetwear and designer, but at the end of the day that represents about 25% of the market, not everybody is a young hipster. Really soft, comfortable stretch, and make it look a little more polished — that's where the men's industry is going."
That includes at work.
The casualization of the workplace has been undeniable, especially with even New York City's blue-blood financial institutions in recent years easing up on their strict dress codes. Then the pandemic sent almost all white-collar workers home, with many of them still conducting business virtually — and under-dressed — even as the lockdown eased.
(Source: Retail Dive https://www.retaildive.com/news/what-follows-suits-in-mens-apparel/583090/