Two South Lake Ave. Retailers Appear Headed for Bankruptcy

The parent company of two clothing retailers in Pasadena could be the next major American retailer to file for bankruptcy, a CNN Business report said Sunday.

Tailored Brands, which owns Men’s Wearhouse at 406 S. Lake Ave. and Jos. A. Bank Clothiers at 345 S. Lake Ave Suite 104 in Pasadena, has been consulting bankruptcy advisers “for a couple of months now,” and the odds are high that they will be filing, CNN quotes Debtwire analyst Reshmi Basu, an expert in retail bankruptcies, as saying.

“There is not going to be as much demand given the work from home environment,” the analyst told CNN Business.

The clothing sector of retail has been particularly hard hit by the coronavirus crisis, with consumer demand for new clothes falling sharply. A number of national retailers, including J.Crew, Neiman Marcus and JCPenney, have filed for bankruptcy. In May, government figures showed clothing store sales have plunged 89 percent in a month, mostly attributed to COVID-19 restrictions.

The CNN Business report said another company that faces bankruptcy is Ascena Retail Group, which owns the Justice, Lane Bryant, Dress Barn and Catherines’ clothing store brands. Recently Ascena warned there is “substantial doubt” about their ability to remain in business.

Tailored Brands disclosed it is at risk of bankruptcy or even shutting down operations because of the Covid-19 crisis

In a filing Wednesday, Tailored Brands said it is at risk of bankruptcy or even shutting down operations.

“If the effects of the Covid-19 pandemic are protracted and we are unable to increase liquidity and/or effectively address our debt position, we may be forced to scale back or terminate operations and/or seek protection under applicable bankruptcy laws,” the filing said.

Tailored Brands suspended rent payments for April and May when most of its locations were shut, saying it has been able to negotiate rent deferrals for a significant number of its stores, with repayments beginning at the end of 2020 into 2021. It also furloughed or laid off 95 percent of its 19,000 employees, according to CNN.

Even after some stores reopened in early May, sales have not gone well, falling 65 percent at Men’s Wearhouse locations that have been open for at least one week, and 78 percent at Jos A. Bank locations.

Sales at Tailored Brands’ other asset, K&G stores, were down some 40 percent, the report said.

Overall, the company has about 1,400 stores in the United States and Canada, with about half under the Men’s Wearhouse name.