Tailored Brands, Inc., the American fashion retail house that owns Men’s Wearhouse, has been on the verge of going bankrupt ever since pandemic has been constantly ruining its sales over the last few months.
And when the retailer missed US $ 6.1 million interest payment on 1 July, the industry knew it was just a matter of time when the announcement of the company going insolvent will be made.
Finally, the retailer announced yesterday (27 July) that it is pursuing a reorganisation under existing bankruptcy laws. What’s noteworthy is that this might happen as early as 2 August 2020 when the firm enters its third quarter.
That’s just few days away! As and when this happens, shareholders will be wiped out.
Confirming on the same, the company said in its 10-Q filing that if and when it considers reorganising under existing bankruptcy laws, there will in all probability no value distributed to its shareholders and the shares could be cancelled for no consideration.
The filing also read that the retailer has not only considered the projected effect of the pandemic on its cash flows, but also analysed its future compliance with financial covenants under its asset-based lending (ABL) facility.
Based on the above, the retailer will not remain in compliance with the fixed charge coverage ratio covenant under the ABL facility beginning in the Q4 2020.
Watch out this space for more developments!
Known for its impeccable apparels and footwear, Tailored Brands, Inc., generates revenue of US $ 2.881 billion.