Tailored Brands on Tuesday announced that it has emerged from bankruptcy having wiped $686 million of debt from its books.
The company will run its operations and execute a turnaround with the help of a $430 million ABL facility, a $365 million exit term loan and $75 million of cash from a new debt facility, according to its press release.
Now for the hard part. Tailored Brands, which in addition to Men's Wearhouse runs Jos. A. Bank, Moores Clothing for Men and K&G, plays in a particularly downtrodden area of apparel retail: menswear.
Suits and ties for years have been increasingly shunned at both the office and special events, and both of those occasions have all but ceased during the pandemic. Yet suits and ties have been the mainstay of Tailored Brands' portfolio.
"Tailored Brands was a little like Ann Taylor in selling business things to people who had to wear them, at a price point that was within reach," Alan Behr, fashion industry attorney and partner at Phillips Nizer, said in August, shortly after the company filed for bankruptcy. "I remember when a bank teller wore a suit, a high school teacher wore a suit. That is not necessary anymore. Fewer and fewer people need tailored garments, so those brands at the lower end were most exposed."
Tailored Brands may have previously been hampered by its pre-bankruptcy $1.4 billion debt pile. Free of much of that now, the conglomerate faces the same challenges as before, however. Formalwear won't disappear entirely, but the pandemic has only accelerated trends toward comfort and individual expression. That means there's opportunity in the menswear segment, though not in what has traditionally been Tailored Brands' forte.