"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."

"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."

Menswear retailer Tailored Brands Inc has said it may need to seek bankruptcy protection or discontinue operations if its business continues to be impacted by the Covid-19 crisis.

The retailer said it has taken "decisive actions to manage liquidity", including borrowing money, while opening nearly half of its stores across the United States and Canada.

In an update yesterday (11 June) the group said net sales were down 60.4% due to the Covid-19 pandemic, with February comparable sales up 2.4% before the pandemic unfavourably impacted the business.

On 17 March Tailored Brands closed all stores and on 20 March it closed all e-commerce fulfilment centres in the US and Canada.

As of 2 May, the company had long-term debt of $1.4bn and $244.2m of cash and cash equivalents. In addition, it had $385m of borrowings outstanding on its ABL Facility, with availability totalling $88.8m.

"The company's day-to-day operations and business have experienced significant disruptions due to the unprecedented conditions surrounding the Covid-19 pandemic," Tailored Brands said in a filing. "These disruptions include, but are not limited to, the temporary closure of all corporate offices, the company's decision to furlough or temporarily layoff a significant portion of its employees and work from home orders, all of which have slowed the company's routine quarterly close process."

It added, in addition, the company's management team has had to devote "considerable time and resources" to manage emerging issues impacting its operations.

"The US and other countries are responding to Covid-19, which has adversely impacted, and will continue to adversely impact, our operations in a number of ways, including supply chain disruptions, temporary or permanent store closures, reduced traffic to our stores when they reopen, cancellations of large gatherings such as proms and weddings, and disruptions to our employees working at our stores, distribution centres and offices.  

"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. This could result in a complete loss of shareholder value.

"The extent to which Covid-19 impacts our operations will depend on future developments, which are highly uncertain, including, among others, the duration of the outbreak, new information that may emerge concerning the severity of Covid-19 and the actions, especially those taken by governmental authorities, to contain the pandemic or treat its impact. As events are rapidly changing, additional impacts may arise that we are not aware of currently."

Several US retailers have recently fallen casualty to the coronavirus crisis including Stage Stores, Neiman Marcus, J.Crew and JCPenney.