If you’ve kept up with our pandemic coverage, it may not seem much of a surprise that storied retailer, Brooks Brothers, is filing for Chapter 11 bankruptcy. In late May, the company announced plans to close their three remaining American factories and rumors of a failed attempt to sell the company in a private sale were circulated by Bloomberg.
But what does the future look like for the brand was founded in 1818 and has dressed all but four U.S. presidents? How will things proceed?
The Covid-19 pandemic thwarted ongoing attempts to sell off the company, a sale that had begun in 2019. While substantial, Brooks Brothers’ debt burden ($600 million) is considerably lower than many other major American retailers that have filed for bankruptcy in the past few months (J.Crew at $3 billion and J.C. Penney at $8 billion).
Added to which, the company isn’t owned by private equity (yet).
Regardless of how bankruptcy proceedings unfold, Brooks Brothers will be scaling down significantly. Of their 250 stores in North America, 51 will be permanently closed, likely as to make for a less cumbersome, more palatable sale.
In order to further streamline, Brooks Bros. announced the closure of their three last American factories, which will close their doors permanently on August 15. Though the thought of this great American stalwart ending their domestic manufacturing was shocking, CNBC reports that a measly 7% of the brand’s total product had been made in the U.S.
Those last few factories were more about PR and appeasing a small segment of their clientele than actual domestic production.
Brooks Brothers obtained a $75 million debtor-in-possession loan to see them through their bankruptcy proceedings, which comes along with a $20 million loan they’d received back in May. Italian millionaire owner, Claudio Del Vecchio, stated, “Our priority is to start this important chapter with a new owner that has appreciation for the Brooks Brothers legacy.”
Though Brooks Brothers had struggled to secure a buyer in their private sale, it seems likely that someone will buy the famous American brand. In comparison with other brands with exorbitant debt loads and huge private equity buyouts, Brooks Brothers may seem a rather tempting purchase.
What remains to be seen, however; is just how Brooks Brothers will adapt to a changing world. A world where workplace dress codes are rarely enforced and a world, which in many places, doesn’t even allow for workplaces to be open at all!
If critics could accuse J. Crew, a fairly humble mall brand, for being out of touch; imagine what they’d say about the above lookbook. Hovering somewhere in the stratosphere of semi-formal Americana, Brooks Brothers has never felt particularly approachable, nor do I know anyone in my L.A. circle that has any knowledge of the blue-blood East Coast brand.
For over a century, BB set the benchmark for workplace sophistication, but now, when Casual Friday has become a weeklong affair, it’s hard to see what lane Brooks will pursue to remain relevant and viable.
In a perfect world, the new Brooks leadership might dig into the archives and bring us reproductions of their iconic classics, ideally made here in the U.S., but chances of this feel remote.
Whoever the new owner may be, they’ll likely continue the brand’s dalliance with fast fashion, lowered quality, and outsourced labor. It feels likely that Brooks Brothers will remain on the American fashion landscape, but in what form, only time will tell.