Brooks Brothers Commences Chapter 11 Cases to Support Value-Maximizing Sale Process and Obtain New Financing

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Brooks Brothers, Americas oldest apparel company, today announced that it has commenced Chapter 11 cases in the United States Bankruptcy Court for the District of Delaware to facilitate a value-maximizing sale process.

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Business Wire, Inc.Business Wire, Inc.
Retrieved on: 
Wednesday, July 8, 2020
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Fashion, Online Retail, Retail, Other Retail, Department Stores, Manufacturing, Textiles, Market liquidity, Chapter 11, Title 11, United States Code, Great Recession in the United States
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United States, NEW YORK
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Summary
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  • Brooks Brothers, Americas oldest apparel company, today announced that it has commenced Chapter 11 cases in the United States Bankruptcy Court for the District of Delaware to facilitate a value-maximizing sale process.
  • This capital, together with cash flows from ongoing operations, will provide liquidity to support the Company through the sale process.
  • Brooks Brothers expects to complete the sale process in the next few months, pending court approval.
  • Brooks Brothers will continue to operate its business in the ordinary course throughout the court and sale process.


Brooks Brothers, America’s oldest apparel company, today announced that it has commenced Chapter 11 cases in the United States Bankruptcy Court for the District of Delaware to facilitate a value-maximizing sale process. A transaction would ensure that the iconic Brooks Brothers brand is positioned to continue serving its loyal customers for years to come.

The Company has also secured commitments for a debtor-in-possession (“DIP”) financing facility of $75 million from WHP Global, a leading brand management firm, subject to court approval. This capital, together with cash flows from ongoing operations, will provide liquidity to support the Company through the sale process. This includes honoring certain employee-related wages and benefits obligations, paying claims of certain critical vendors and suppliers, and ensuring the continuation of other operations in the ordinary course of business with as minimal interruption as possible.

“For over 200 years, Brooks Brothers has remained resilient, navigating evolving fashion trends, fluctuating economic cycles, and even world wars,” said Claudio Del Vecchio, Chairman and Chief Executive Officer. “Our long history is a testament to the strength of our brand and our mission since 1818: serving customers through innovation, fine quality, personal service, and exceptional value.”

Mr. Del Vecchio continued: “Our priority is to start this important chapter with a new owner that has appreciation for the Brooks Brothers legacy, a vision for its future, and aligns with our core values and culture. Prior to COVID-19, we were already conducting an evaluation of various strategic options to position the Company for future success in a rapidly transforming retail environment, including a potential sale of the business. Industry headwinds were only intensified by the pandemic. Seeking protection to facilitate an efficient sale of the business is the best next step for the Company to achieve its goals, over any other alternative.”

Details on the Sale Process

  • The Company will commence a competitive auction where parties can submit qualified bids. Timing details for the process will be made available in the coming days.
  • Brooks Brothers expects to complete the sale process in the next few months, pending court approval.
  • Brooks Brothers will continue to operate its business in the ordinary course throughout the court and sale process.

Omnichannel Business Update

  • The Company will continue to examine reopening stores that have been temporarily closed due to COVID-19, and as local and state public health and government officials allow and as it is economical to do so.
  • Prior to the petition date, on account of the COVID-19 pandemic, the Company decided to close approximately 51 Brooks Brothers stores in the United States, and have closed, or are in the process of closing such stores.
  • Details on the store closures can be found in the Company’s first day motions, filed publicly with the court.

Information on the DIP Lender

WHP Global is a New York-based firm that owns and develops global consumer brands. The firm strategically invests in high-growth distribution channels, digital commerce platforms, and global expansion. WHP Global owns the ANNE KLEIN and JOSEPH ABBOUD brands. For more information, please visit www.whp-global.com.

Additional Information

The Company’s restructuring counsel is Weil, Gotshal, & Manges LLP, its restructuring advisor is Ankura Consulting Group and its financial advisor is PJ Solomon L.P.

Court filings and other documents related to the process are available at http://cases.primeclerk.com/brooksbrothers or by calling the Company’s claims agent, Prime Clerk, at 877-930-4317 (toll-free) or 347-899-4592 (international) or sending an email to [email protected]

ABOUT BROOKS BROTHERS

Established in 1818, Brooks Brothers was the first American brand to offer ready-to-wear clothing and has continued throughout history with iconic product introductions including: seersucker, madras, argyle, the non-iron shirt, and the original polo button-down collar. Over two centuries later, Brooks Brothers is proud to uphold the same traditions and values and to be the destination for ladies and gentlemen from every generation. Since its founding 202 years ago in New York, Brooks Brothers has become a legendary international retailer with 200 stores in North America and 500 worldwide in 45 countries while maintaining a steadfast commitment to exceptional service, quality, style, and value.

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