Posted: July 16, 2020
The private company and the oldest clothing retailer in the United States, which filed for Chapter 11 bankruptcy on July 8, is said to have secured a zero-interest loan of $ 80 million.
The loan was reportedly granted by ABG-BB, a partnership between Authentic Brands Group, which bought Barneys New York in 2019, and Simon Property Group, which currently competes with WHP Global; a newly founded brand management platform with plans to invest in consumer brands over the next five years, and which previously offered US $ 75 million debtor-in-charge financing to Brooks Brothers. “I am convinced that the terms will be the best that can be obtained,” Garret Fail, the lawyer for Brooks Brothers, reportedly told the US bankruptcy judge, who is to sign an order authorizing the company to borrow 60 million first. dollars, then decide on the remaining $ 20 million. Brooks Brothers plans to hold a court-supervised auction for the sale of the business in the near future.
In a note to customers dated July 8, the retailer said it had entered the process “to find a potential owner who believes in their mission and values, and who shares their ambition” and was filing a case for Chapter 11 as “protection to manage what has been an incredibly difficult time for all industries, especially retail, during the Covid-19 pandemic”.
The Chapter 11 filing shows that the company, owned and run by Italian billionaire Claudio Del Vecchio, owes around $ 500 billion to $ 1 billion to around 25,000 creditors, a sum that includes $ 8 million in unpaid rent, while its assets are listed ranging from $ 500 million to $ 1 billion. The brand plans to close 51 of its 250 stores in the United States and has already closed three factories located in the states of New York, Massachusetts and North Carolina.
Sources: Hypebeast / Esquire