The privately-owned company and oldest clothing retailer in the U.S., which filed for Chapter 11 bankruptcy on July 8, is reported to have secured a zero-interest loan of US$80 million.
The loan is said to have been provided by ABG-BB, a partnership between Authentic Brands Group, which bought Barneys New York in 2019, and Simon Property Group, which is currently competing against WHP Global; a recently founded brand management platform with plans to invest in consumer brands over the next five years, and which previously offered US$75 million debtor-in-possession financing to Brooks Brothers. “I’m convinced the terms will be the best that can be achieved”, Garret Fail, Brooks Brothers’ lawyer, allegedly told the U.S. Bankruptcy Judge, who is to sign an order permitting the company to first borrow US$60 million, and later decide on the remaining US$20 million. Brooks Brothers is said to be planning to hold a court-supervised auction in the near future for the sale of the company.
In a note to customers dated July 8, the retailer said it had entered the process “to find a potential owner who believes in its mission and its values, and who shares its ambition” and that, it was filing for Chapter 11 as a “protection to manage what has been an incredibly challenging period for all industries, especially retail, during the Covid-19 pandemic”.
The filing for Chapter 11 allegedly states that the company, owned and headed by Italian billionaire Claudio Del Vecchio, owes between US$500 million to US$1 billion to roughly 25,000 creditors, a sum that includes US$8 million in unpaid rent, while its assets listed range from US$500 million to US$1 billion. The brand allegedly plans to close 51 of its 250 stores in the U.S. and has already shut down three factories located in the states of New York, Massachusetts and North Carolina.
Reference:
Brooks Brothers secures loan after filing for bankruptcy – International Leather Maker. (n.d.). Retrieved July 21, 2020, from https://internationalleathermaker.com/news/fullstory.php/aid/8692/Brooks_Brothers_secures_loan_after_filing_for_bankruptcy.html
