Fremont, Calif. — Tailored Brands, the parent company of professional menswear retailers Men’s Wearhouse and Jos. A. Bank, has announced a corporate restructuring that entails closing up to 500 stores. The Fremont, Calif.-based firm says the “unprecedented and industry-wide” disruption caused by the COVID-19 outbreak was the catalyst behind the move.
Tailored Brands has identified the 500 stores but did not disclose the retailers, locations or timing of those closures. Other brands in Tailored’s umbrella include K&G and Moores Clothing for Men. The company had 1,445 U.S. stores as of May 2, 2020 totaling 9.1 million square feet.
Additionally, Tailored Brands plans to cut expenses by reducing its staff by 20% by early August. The company expects severance payments and other termination costs to total $6 million.
The economic harm stemming from the COVID-19 pandemic is having an outsized impact on the company’s revenue stream. In its first-quarter fiscal business update, Tailored Brands reported that for the period between Feb. 1 and May 2, net sales were down 60.4% year-over-year. Its e-commerce revenue, which includes rental services, was down 31.9% during the same period.
Going forward the company will focus on its e-commerce platform and revised footprint of physical locations. The company has reported that 96% of its stores are reopened following government-mandated shutdowns of non-essential retailers across the country.
“Unfortunately, due to the COVID-19 pandemic and its significant impact on our business, further actions are needed to help us strengthen our financial position so we can navigate our current realities,” says Dinesh Lathi, president and CEO of Tailored Brands. “While today’s announcement is a difficult one, we are confident these are the right next steps to protect our business and position us to more effectively compete in today’s environment.”
CNBC reports that Tailored Brands skipped a $6.1 million payment to its bondholders in June, which began a 30-day grace period for repayment.
The corporate restructuring includes the departure of Jack Calandra, Tailored’s executive vice president, chief financial officer and treasurer. Calandra will leave the company at the end of July, and his duties will be split between Lathi and the firm’s chief restructuring officer Holly Etlin. Etlin was formerly with AlixPartners and began working with Tailored’s board of directors in March.
— John Nelson