Deals
Brooks Brothers Seeks Buyer as Wall Street Works
From Home
By Lauren
Coleman-Lochner and Eliza Ronalds-Hannon
1 May 2020,
00:17 CEST Updated on 1 May 2020, 18:18 CEST
Two-century year old retailer extending sale
process
Many of its U.S. stores were struggling before
Covid-19
Brooks
Brothers Inc., the two-century-old menswear company that set the standard for
aspiring Wall Street bankers, is seeking to sell itself.
The
retailer has extended a sale process begun last year, according to people
familiar with the matter who asked not to be identified because it wasn’t
public. Depending on how many stores a buyer wanted, a transaction could
ultimately be part of a bankruptcy filing, they said. The company has about
$600 million in debt.
“In the ordinary
course of business, Brooks Brothers consistently explores various strategic
options to position the company for growth and success,” a company
representative said in an email. The company has “nothing to announce at this
time.”
Even as
some states start to ease lockdowns aimed at containing the coronavirus
pandemic, it remains to be seen how quickly consumers will return to stores and
how much they’ll spend. While even the affluent Brooks Bros. clientele has
little need for new suits at the moment, the brand’s history and cache has
elicited interest, the people said.
1818
Opening
Many of the
company’s approximately 250 U.S. locations have struggled, some of the people
said. It operates a similar number of stores in more than 40 other countries,
according to its website.
On the one
hand, Brooks Brothers customers are less affected by the millions of job losses
that have roiled the country, because many can do their jobs remotely. But it
will be months or even years before workplaces can fully reopen, and no one
knows what routines and habits, including what people wear to work, will look
like post-pandemic.
Henry Sands
Brooks opened the first store in 1818 on the corner of Cherry and Catherine
streets in lower Manhattan. The company, which calls itself the oldest U.S.
clothing retailer, has dressed U.S. presidents including John F. Kennedy and
now sells men’s, women’s and children’s clothing.
Its suits
became the uniform of the Wall Street macher, but as it expanded, it opened more
stores in malls and on Main Streets, some of which are dragging on its
performance now. British merchant Marks & Spencer bought the company in
1988, then sold it to billionaire Claudio del Vecchio in a deal completed in
2002.
— With
assistance by Boris Korby
J. Crew nears bankruptcy, Brooks Brothers seeks
buyer
The companies are just the latest retailers facing
financial difficulties
May 01,
2020 10:15 AM
J. Crew and
Brooks Brothers are among the latest retailers on the brink of bankruptcy.
J. Crew,
which has 322 stores, is seeking $400 million in financing to fund operations
during bankruptcy, CNBC reported. And Brooks Brothers is seeking to sell
itself, a deal that could potentially be part of a bankruptcy filing, according
to Bloomberg.
J. Crew,
whose holdings include retailer Madewell, was struggling before the coronavirus
sent shoppers home in March. The company saw “meaningful improvement” in its
2019 business, according to Moody’s, compared with the prior year, but as of
February it had $93 million in total liquidity as debts came due. TPG Capital
and Leonard Green & Partners bought the company in 2011 for $3 billion.
Similarly,
Brooks Brothers’ woes predate the health crisis. The Wall Street favorite has $600
million in debt and many of its 250 U.S. locations were also struggling before
the pandemic, sources told Bloomberg. Its attempt at a sale began last year.
The
pandemic has exacerbated retailers’ financial problems. High-end department
store Neiman Marcus is also nearing bankruptcy, though a group of its investors
are pushing for the firm to seek a sale. J.C. Penney, too, is in talks with its
lenders for at least $800 million in bankruptcy financing. [CNBC, Bloomberg] — Georgia Kromrei
With a Glance Backward, Brooks Brothers Looks to
the Future
After
Claudio Del Vecchio bought Brooks Brothers in 2001, one of the first things he
did was read stacks of letters from longtime customers who were unhappy with
the changes made by the previous owners.
By Teri
Agins
April 21,
2018
In early
2002, just a few months after he officially took over as the new owner and
chief executive officer of Brooks Brothers, Claudio Del Vecchio confronted the
reality that the classic American retailer had largely lost its way.
Mr. Del
Vecchio knew that many of the clothing fabrics were no longer of high quality,
that too many of its shirts were ill fitting and that there were often
disconcerting irregularities, like a rack of navy blazers that weren’t the
exact same shade of navy.
And
longtime customers had noticed.
Among Mr.
Del Vecchio’s first acts as owner was to read a stack of angry letters from
Brooks Brothers loyalists who griped about how the merchandise quality had
fallen under the previous owner, the British retailer Marks & Spencer. They
also balked at the limited selection of classic blazers and suits in the
stores.
Those
letters confirmed much of what Mr. Del Vecchio, a wealthy Italian entrepreneur,
had seen for himself and stiffened his resolve to return to the company’s
roots. “I saw the business opportunity to increase sales,” he said. “I knew how
to fix this.”
A new
executive team shifted into crisis mode. Led by an experienced chief merchant,
Eraldo Poletto, with whom Mr. Del Vecchio had worked at Casual Corner (a
women’s wear retail chain that Mr. Del Vecchio sold in 2005), they began to
corral the company’s best suppliers to revamp all the store’s merchandise.
Hundreds of garment styles required new specifications, better fabrics and
apparel factories. It took about six months for the first shipments of the
improved garments to arrive in stores — swapping out the oversize khakis and
shapeless polo shirts.
Among the
upgraded versions were luxurious three-ply Italian cashmere sweaters, replacing
the two-ply Mexican cashmeres, and three styles of blazers and khakis, instead
of just one. By April 2003, the store had completely overhauled its merchandise
— and its loyal fans started coming back.
By 2004,
Mr. Del Vecchio said, the privately held Brooks Brothers was modestly in the
black, reversing a series of money-losing years that had begun in the late
1990s.
The history
of Brooks Brothers and the tenure of Mr. Del Vecchio — who has been wearing
Brooks Brothers for more than half of his 61 years — will be celebrated on
Wednesday evening, when the company will host a black-tie gala at Jazz at
Lincoln Center for 1,000 of its best customers, friends and celebrity guests to
mark its 200th anniversary. The all-American jazz program, produced by the Jazz
at Lincoln Center Orchestra’s artistic director, Wynton Marsalis, befits the
all-American clothier, which has been the group’s corporate sponsor and
official clothier since the 1990s.
Among my family, schoolmates and friends BB was practically the only source of all our clothes, From underwear, socks, shoes, shirts khakis ( "chinos") bathing suits, shorts, blazers, suits, overcoats. The only other sources were J Press, Tripler's ,and later Paul Stuart, but prices were higher and usually these were the purveyors to the adults. The seasonal, perhaps twice-yearly safari to BB to "get what you need" was a major event. Secondary source was ( and remains) LL Bean for " sports clothes".
ReplyDeleteRalph Lauren was the usurper. As BB quality declined and they removed the "classics" RL filled the gap. Initially rejected by Preppydom as an interloper, the quality and availability caused a capitulation- despite his logo or name being ubiquitous. Sometime in the 90s they attempted to imitate the "Gap" ( known among the posh preppies as Gap-Crap) offering pre-washed shirts, jeans and khakis and eliminating - among many other classics- the "broad- striped" buttoned- down collar that was a preppy uniform. In disgust, customers purchased the RL copies, then realising they were as good and as long-wearing. The damage was done. BB's products then bore "made in China" tags. Game over. Does BB want to survive? Call Ralph and ask for help.