Pre-Existing Conditions: Brooks Files For Bankrupty, Blaming Coronavirus

Brooks Brothers filed for bankrupty today, a symbolically ominous sign for the brand that did the most to establish the Ivy League Look in the United States.

In the excerpt below from the Wall Street Journal’s coverage, president Claudio Del Vecchio blamed the lockdown from coronavirus:

Brooks Brothers dressed the American business class in pinstripes for more than 200 years and survived two world wars and the shift to casual dressing. But it was no match for the coronavirus pandemic.

The closely held company, which is owned by Italian businessman Claudio Del Vecchio, filed for bankruptcy protection in Wilmington, Del., on Wednesday. One of the few brands to make clothes domestically, it plans to halt manufacturing at its three U.S. factories on Aug. 15 and will use the bankruptcy process to search for a new owner.

Brooks Brothers joins a parade of U.S. retailers seeking relief in bankruptcy court since March, including Neiman Marcus Group Inc., J.Crew Group Inc. and J.C. Penney Co.JCPNQ -3.44%Economic fallout from Covid-19 has also pushed high-profile companies in other industries into bankruptcy, including Hertz Global Holdings Inc. HTZ +0.36%andChesapeake Energy Corp. CHKAQ +27.71%

Mr. Del Vecchio blamed the pandemic for the company’s current troubles, saying in an interview on Wednesday that temporarily closing stores during the lockdowns greatly reduced revenue, yet the company still met its contractual obligations to workers, suppliers and other vendors. He said he wished that the government had provided a lifeline to larger retailers the way it did to small businesses.

“Through every era, we had challenges, but we were confident we would be able to manage through them,” he said. “Retailing has been changing a lot in the last four to five years, and we were in the process of adapting to that new environment. When coronavirus came, there was really no way to sustain things.”

We live in an unprecedented time in human history, one that simultaneously includes mass mobile information sharing, extreme political polarization and subsequent propaganda, and a pandemic that, because of the other factors, has made information unreliable. However, as the article details, and from what industry insiders have told me, Brooks was already financially overextended and was pondering various scenarios before the virus hit.

There is much talk that when someone dies — from an underlying illness or perhaps even a car accident — and the person test positive for the virus (even though previously asymptomatic), the death is attributed to coronavirus.

Someday in the future the light of truth will finally break forth, and all will be revealed in its nakedness. Brooks Brothers has kept America from having to go around naked for over 200 years; let’s hope it finds a way to get through this and at least hang on to a distant memory of what it once was when it was small and special. — CC

41 Comments on "Pre-Existing Conditions: Brooks Files For Bankrupty, Blaming Coronavirus"

  1. Poison Ivy Leaguer | July 8, 2020 at 1:35 pm |

    Since this is a reorganization not a liquidation, Brooks Brothers will probably reemerge as something. I’ve a feeling that it ain’t gonna’ to be purist trad.

  2. I haven’t yet jumped into the docket (for better or worse, Chapter 11 cases in Delaware and elsewhere have been my wheelhouse for most of my career), but I understand that this is mostly a ‘stalking horse’ case: a ‘brand name’ bidder (Berkshire, for instance) comes in with an offer for all the assets in order to gin up interest and encourage higher bids. But Poison Ivy Leaguer is also correct: Brooks here is not closing its doors, but rather seeking to shed ‘bad’ debt and reorganize, to come out leaner-and-meaner; vendors who hang in there through the bankruptcy get rewarded; etc.; cash mostly comes from secured lenders or the above-described bidder; etc.

    If the group is interested in this nerdy stuff, I’m happy to be Bob Uecker and offer play-by-play as the case progresses.

  3. Menswear stalwarts are being beat down like rabid dogs! There are rumors that Tailored Brands (Men’s Wearhouse) will be the next domino to fall, joining Barneys New York and John Varvatos, which have filed for bankruptcy.

  4. Read articles comparing BB to Lululemon today. The Four Horsemen cannot be far behind. Shiva H. Vishnu.

    Will

  5. Charlottesville | July 8, 2020 at 2:48 pm |

    Fittingly, today I am wearing a navy suit, repp tie and tab-collar shirt, all from Brooks, which would be quite appropriate at a funeral. I fear that Poison Ivy Leaguer is right that whatever emerges from bankruptcy will not resemble the classic, traditional Brooks that a lot of us remember, but then it has already been quite a while since that Brooks was alive.

    I hope that Southwick and Garland survive, but will not miss the ubiquitous BB mall stores. The WSJ article said that the company has 500 stores, including 300 outside the US. That is an awful lot of brick and mortar for a higher-end clothing store. While I wish there were a huge market for “our kinda clothes,” I am thankful that J. Press, O’Connell’s, Eljo’s and the handful of other traditional shops have avoided ruinous geographic expansion. I hope they all will be able to survive the double plagues of slobification and coronavirus.

  6. Hardbopper | July 8, 2020 at 2:51 pm |

    Totally off topic, but anybody remember Richman Brothers out of Cleveland? They were a step down from BB. They closed in the 80s.

  7. Jesse Livermore | July 8, 2020 at 4:16 pm |

    Abraham Lincoln was buried in a Brooks Brothers suit.

  8. Abe was wearing Brooks at Ford’s Theatre. The coat is on display in the exhibit area.

  9. elder prep | July 8, 2020 at 5:04 pm |

    I, too, am concerned that when BB is salvaged, and it will, it will reappear as a fashion-conscious clothing outlet, with trad as a sideline. Why this outcome? There are just not enough of us who dress conservatively to keep a pure trad shop profitable. Quel Dommage . . .

  10. whiskeydent | July 8, 2020 at 5:34 pm |

    One piece of good news: O’Connells is running ads here again. Let’s support the stores that support the site.

  11. Tom Conroy | July 8, 2020 at 6:49 pm |

    My ideal store would be the Brooks circa 1985. Don’t expect that to happen. Thankfully O’Connells comes close.

  12. Nope, I don’t expect that to happen either. As Brooks goes, seemingly, so does our Country.

  13. Anonymous | July 8, 2020 at 7:23 pm |

    I used to travel several times a year to Williamsburg, Va. for work meetings. When the BB outlet there first opened, I couldn’t get there fast enough. It had the real thing from their real stores. New merchandise was added. The discounts were pretty steep, but every so often, they cut the prices even further. I really looked forward to it. Over time, I started to notice ties with a different label. Then shirts made overseas. After a while, it became clear that all of the items sold were no longer old inventories from their stores, but stuff made just for the outlet stores. Nothing of interest. I haven’t been down that way in a very long time, but if I happened to be driving right past it, there would be no reason to stop. Not the way it started out, but what is?

  14. I was born in 1990, so I can’t say I have any first-hand knowledge of what Brooks Brothers was like in its heyday (if any other youngsters want to get an idea, or if BB veterans want to shed a tear, read the chapter on Brooks in Bruce Boyer’s 1985 book Elegance).

    I am fortunate to live in Boston and to have become a recent client The Andover Shop, which still feels like the real thing.

  15. Love BB. I think it’s hard to be in a lot of businesses at once (vertical integration): manufacturing, design, marketing, and retail. Let’s hope they find some good shareholders to take over and establish a business model that is sustainable.

  16. Charlottesville | July 8, 2020 at 9:40 pm |

    Eric – So true. I am very glad that you are carrying the trad torch for a younger generation, and I always enjoy your posts and comments. Keep up the good work!

    Brooks, when I became a customer, was still something like what I think most of us old guys remember, if not what it would have been circa 1965 which was a couple of decades before my time there. One could walk in and be pretty much assured of finding a knowledgeable salesperson and getting a very good product, well made and tastefully cut, at a not-cheap but fair price, and during the semi-annual sales, at a real bargain if one could find the coveted suits or shirts in one’s size. I first started shopping at BB in DC and NY while a student and then a new lawyer in the mid 80s, but I suppose that version of Brooks was largely gone when you would have been coming on the scene. I am thankful that I got to see it, even in its diminished state, and am most thankful for The Andover Shop, O’Connell’s, J. Press, Eljo’s, and the other places that, like you, still carry the torch.

    But, as one who remembers BB, not in the heyday perhaps but before the current era, I ask you to think about a time a few years hence when The Andover Shop and J. Press and the rest may all be gone, and all that is available are hoodies and sneakers, probably overpriced, and considered too dressy by the masses for any occasion but a funeral. That time is not here yet, and I pray it may never come, but the exercise gives a taste of what we older chaps are lamenting in the passing of a grand old store, in fact an institution.

    Sorry to be maudlin, but I remove my hat (Panama for summer) in memory of 202 years of history, at least a 185 or so of which were pretty darn good.

  17. Gary Glazer | July 8, 2020 at 10:27 pm |

    I remember Richman Brothers very well-they were no Brooks Brothers.

  18. Long time reader, but first time commenting. Brooks Brothers has special meaning to me. I migrated to SoCal for a job in the early 90s. An older colleague, a bank attorney from Chicago, who daily wore rep ties, OBDC, kahkis, and a Brooks Brothers blazer, or BB suits, would give me the once over and sigh. His satorial influence and my introduction to “old LA” — think Jonathon Club or the California Club– made this rube realize he was completely over his head. One day, the kind lawyer introduced me to the Brooks Brothers in downtown LA and I began to build up a wardrobe that has lasted until this day. While I live in the country and am most comfortable in Wranglers and Dan Post boots, I still slip into the same BB suits and ties purchased decades ago when rarely needed. When I do, I almost always think of the attorney and thank him.

  19. Henry Contestwinner | July 9, 2020 at 1:40 am |

    I’m looking forward to shopping at the revitalized Brooks Brothers for all my hoodie, board short, and flip-flop needs.

  20. Too Much Johnson | July 9, 2020 at 3:01 am |

    I, for one, will not mourn.

    Brooks Brothers largely died for me in the early 90s. What killed what was left of Brooks was, in my opinion, an inability to sell anything at all to what should have been their base of loyal, repeat customers.

    The last time I was at the Brooks in Plaza Frontenac – two days before Christmas 2019 – they had a dozen or so of some of the most beautiful, well-cut camel hairs I had seen in a good many years.

    Did I need a new camel hair? No. Did I want a new camel hair here and now and the prospect of post-Christmas sales be damned? Yes!

    So I stood next to the rack for a good five or ten minutes while watching too many salespersons (presumably on commission) flitting about in a store (surprisingly devoid of customers for the 23rd) trying to sell the usual cheap garbage to the one-time-only crowd with little obvious success.

    After being completely ignored, I left.

    With a simple “They look lovely, don’t they sir? What size are you? 42 regular? Here, try this one on…” any salesperson with an ounce of sales acumen could not only have sold me the camel hair in less time than it took to write this but could have easily added an OCBD or two and maybe a tie to the sale as well. I was obviously in that sort of mood after all.

    Well, it was their loss, not mine.

  21. Andrew K. | July 9, 2020 at 4:17 am |

    I would cut at least 1/2 their SKU’s, eliminate ridiculous things like “Brooks Brothers watches” and leather shoes with the BB logo embossed on them, lower prices slightly but also have fewer sales. Also lose the garish cheesy logo on the polo shirts, which are otherwise excellent quality.

  22. BB could be an excellent small brand with just a few stores across America, and a few stores abroad. American manufacturing should be kept and prices should be fair (they’re ridiculously high, currently). The website needs to be updated and look more high-end-classic- menswear, which means it has to be very simple, tasteful, and hopefully not have any models. But this is not what the owners of the company have in mind. The only thing that matters to them is profit, and if they can’t keep this corporation going, they will simply close it; they will never agree to turn BB into a small brand, aimed at a niche clientele.

  23. Non ut sibi | July 9, 2020 at 5:46 am |

    The problem for any successor owner is that they’re going to need to recoup their purchase price, which means doubling-down on what did BB in in the first place. The ideal scenario of shedding all those outlets, airport and mall stores, etc. down to a core number of locations focused on Made in USA classic apparel won’t give that owner a ROI worth considering. Unfortunately, I’m expecting a further race-to-the-bottom.

  24. A lot of students are going into ungodly debt just for college tuition. They just don’t have $100 for a polo shirt with a sheep logo on the front. They will be paying down that debt forever as well. Not only that the quality of the merchandise is all over the place depending on which country/manufacturer/material makes the stuff.

  25. I wonder what the pandemic and the future of the working world’s ‘office location’ will do to the need for Brooks type dress clothes. I for one, may never return to the office. Given that, my wardrobe is mostly set for the remainder of my life. I for sure will never have to buy another pair of dress shoes.

  26. Old School Tie | July 9, 2020 at 10:50 am |

    I agree with Too Much Johnson and Andrew K. In my opinion the last of “decent” BB occurred in the first half of the 1990s, so mourning now is a tad on the late side. The next thing is the Gordon Ramsey conundrum. Without fail, our foul-mouthed chum will tell failing restaurants and hotels that they have far too many options on the menu. The typical Michelin starred place, on the other hand, has a very pared down menu….if you see hundreds of different shirts on a website it is a sign to stay the blazes away. Lest we forget, JFK wore A&F pants and look how that ended up…

  27. Vern Trotter | July 9, 2020 at 12:33 pm |

    Charlottesville spotted it right away. It leaps out at you: over 500 stores worldwide! Madness!

  28. Seiko Guy | July 9, 2020 at 3:58 pm |

    BB had a lot going for it despite critiques from this group (often deserved). Del Vecchio did some great things (eg new/old OCBD) and loved the brand. However, he ran it like an MBA. Fashion is brutal and if there’s not an authentic design connection to the brand, things suffer. BB in many ways existed but was missing its soul. Look at the success of RL, Sid Mashburn, or Todd Snyder (although I don’t wear TS). Men may not buy suits as much, but there is a growing market for quality, well tailored clothing. Basing your business around a commoditized non-iron is a tough strategy.

  29. I agree with so many comments – I’ll never be returning to an office and I just need Zoom shirts for business. I probably have enough dress shoes to last the rest of my life.

    I will, however, continue to buy clothing from Brooks Brothers – it’s my favorite brand and it makes me feel great to wear Brooks Brothers clothing.

    I recently spoke to a mentee who is working in high finance and he said that his bosses are wearing black t-shirts even on Zoom calls with clients.

    I’ll always wear shirts for business, Brooks Brothers shirts quite specifically.

    I agree with the comment about the sheep logo – I wish they would get rid of that on polo shirts.

  30. whiskeydent | July 9, 2020 at 9:21 pm |

    Bill
    I actually hope this pandemic kills logos in men’s apparel. Maybe it finally dawns on guys that a logo shows they paid extra money to become a walking billboard and exposes them are a shallow fool who aspires for status instead of respect.

    It’s time to put the pony, swoosh, croc and all the rest to pasture.

  31. Down Tradden | July 10, 2020 at 2:52 am |

    I enjoyed the Gant sponsored post. But a black belt with khaki chinos? Or am I the one out of ste.

  32. Down Tradden | July 10, 2020 at 2:52 am |

    *step

  33. Pasadena Senior | July 10, 2020 at 11:23 am |

    When I was in college (in the late 1950’s), most men could afford a Brooks “University Shop” sport jacket or suit. That state of affairs continued well into the 1990’s. Enter Claudio del Vecchio. Almost overnight Brooks’ prices turned astronomical, its style went imitation-Italian, and half the low-end malls in this country (not to mention several airport terminals) had their very own Brooks store. Del Vecchio destroyed Brooks. He’s nothing more than a carpetbagger. We’re all the poorer for his greed.

  34. Regarding logos – “Only a servant wears another man’s crest.”

  35. Trevor Jones | July 11, 2020 at 9:41 pm |

    Interesting: what the políticos are saying Trump is doing (pandering to his core demographic but not expanding) which is responsible for his lowered polling numbers, is exactly what what we are saying BB needs to do to get back to the golden days.
    I, for one, will miss the collars. Kamakura, Michael Spencer, Ratio, all beautiful OCBDs, but they’re not the same. Charlie knew.

  36. Michael Spencer and Ratio were literally the same collars, made in the sub-par Garland factory. The last shirts made in the Paterson NJ factory (circa late 90s/early 2000s) can be recognized not necessarily for their tag, but for the “rolled” attaching of the collar, which Mercer’s shirtmakers still do, and can be found on many handmade shirts from Italy.

  37. Gin & Tonic | July 14, 2020 at 5:29 pm |

    There is a lot of trad money out there to be earned by Brooks Bros. One cannot help but think that a return to more Ivy Style haberdashery and furnishings with a few tasteful sartorialy-correct innovations would yield a significant lift in the fortunes of the Golden Lamb. They could start by consulting with the likes of Mr. Chensvold on this endeavour to steer the ship home. There is an appreciative audience of loyal fans waiting on shore, ready to sing the crew home given the right ly-chartered course.

  38. Too Much Johnson | July 15, 2020 at 5:43 am |

    @ Gin & Tonic – I wouldn’t be so sure of that for any number of reasons the most recent of which have been well hashed-out above.

    As much as I like the idea of a Brooks resurrected by reinventing itself as the new POLO Ralph Lauren for the 2020s and beyond (oh, what any irony THAT would be) the culture/society/civilization required to make that a commercially viable proposition simply isn’t there anymore.

    We seem to be stuck with an endless succession of slight reinterpretations of the lowest common denominator, most unimaginative, and utterly anodyne campus slob-ware c. 1990. How that “look” first took over campuses in their entirety, became dominant across the whole of society, and then completely entrenched/codified/ossified itself over these last 25 years is still largely a mystery to me.

    I somehow suspect that it had just as much to do with both the changes in women’s attitudes/tastes and the rise of the “cult of mediocrity” as it did with the coming of casual Fridays (and then M-T-W-Trs) and the infantilization of adulthood.

  39. Any other than smaller and even more exclusive will be a mistake. I’m a CPA and have managed turnarounds and restructurings for dozens of companies, both publicly traded and privately held. Leveraging the name on lesser quality more ‘fashionable’ merchandise will guarantee the firm’s demise.

  40. Great Lakes Trad | August 1, 2020 at 7:33 pm |

    Hopefully the Brooks store at Connecticut and Rhode Island NW in DC will survive the re-org. The staff are top notch. It is my sentimental favorite for several reasons, one being the location of the store next to St. Matthews Cathedral where JFK’s funeral Mass was performed. I like to visit both locations when I’m in DC.

  41. Arthur McLean | August 3, 2020 at 4:21 pm |

    Loved Brooks from the start. Bought my first blue oxford shirt in 1963-4 Long staple heavy cotton $9.00. WOW!! Still like the Madison no-irons. Hate the fit descriptions of stuff. Regent, Fitzgerald, etc. by thenselves mean nothing. I have to read about them each time I need to buy something. Also, why the emphasis on “trim fit”? Even upscale men are tending to be heavier today.

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