With more than 10 million men out of work and millions more working from home, perhaps indefinitely, this is not the best time to be selling men’s dress clothes.
That’s why Tailored Brands (TLRD), which owns the Men’s Wearhouse, Jos. A. Bank and K&G brands, could be the next major American retailer to file for bankruptcy.
“The company has had bankruptcy advisers for a couple of months now. It’s exploring all of its options and it’s not a 100% that they’re filing, but the odds are pretty high,” said Reshmi Basu, an expert in retail bankruptcies and an analyst with Debtwire, which tracks distressed companies. “There is not going to be as much demand given the work from home environment.”
A number of national retailers already have filed for bankruptcy during the pandemic, including J.Crew, Neiman Marcus and JCPenney. The clothing sector of retail has been particularly hard hit by the crisis as consumer demand for new clothes has fallen sharply. Gap (GPS) reported a record $932 million loss for its first quarter.
Other companies facing the risk of bankruptcy include Ascena Retail Group (ASNA), owner of clothing chains Lane Bryant, Justice, Ann Taylor and Dress Barn, which recently warned there is “substantial doubt” about its ability to remain in business.