Menswear retailer Tailored Brands Inc plans to reduce its corporate workforce by 20% and has identified up to 500 retail stores for potential closure as well as associated opportunities to reduce and realign its supply chain infrastructure.
In a statement, the retailer said it is implementing a series of operating and organisational changes as a result of the unprecedented and industrywide business disruptions resulting from the coronavirus pandemic.
Specifically, Tailored Brands will make organisational changes that will result in the elimination of approximately 20% of its corporate positions by the end of the fiscal second quarter. In addition, it has earmarked up to 500 stores for closure over time as well as opportunities to reduce and realign its store organisation and supply chain infrastructure and organisation.
Tailored Brands president and CEO Dinesh Lathi said while the company has reopened almost all of its retail stores, unfortunately, due to the Covid-19 pandemic and its significant impact on the business, further actions are needed to help strengthen its financial position so it can navigate its current realities.
“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.”
The company expects to record a pre-tax charge of about US$6m in the second quarter in connection with the corporate personnel changes. It has not yet quantified the expense savings and costs related to potential store closures and the corresponding store and supply chain realignment.
Meanwhile, Tailored Brands also announced that Jack Calandra, executive vice president, CFO and treasurer, will leave the company as of 31 July.
In the near term, Calandra’s responsibilities will be divided between Lathi and Holly Etlin, a managing director at AlixPartners who has been appointed to the newly created role of chief restructuring officer, reporting directly to Lathi. Etlin brings more than 30 years of restructuring experience and has been working closely with the executive team and board of directors as an advisor since late March.
Lathi said: “Jack and I have been discussing a transition and, with a full appreciation of both the challenges to be solved and the opportunities to be realised in the next phase of the company’s journey, we both agree this is the right time for a change.”
The company’s brands include Men’s Wearhouse, Jos. A. Bank, Moores Clothing for Men and K&G.
Last month, it said it may need to seek bankruptcy protection or discontinue operations if its business continues to be impacted by the Covid-19 crisis.
Several US retailers have recently outlined similar workforce reductions including Levi Strauss, PVH Corp and JCPenney.