18 Dic

Tailored Brands Credit Agreement

The Houston, Texas-based retailer, which was already facing competition from fast-fashion brands and the transition to online shopping before the pandemic, said it would continue to build on its plan to cut staff by 20 percent and close up to 500 stores. But the trial was not without its drama. Isgur continued to put pressure on the company`s legal team because of the financing conditions of the DIP and stated that the initial terms of the roll-up, the portion of DIP financing that the company would use to repay its secured loans prior to bankruptcy, were not fair to unsecured creditors. He said he was not prepared to accept an agreement in which creditors would not be fairly represented “on the first day” even before a creditors` committee was set up. But after two breaks and an adaptation of the language in demand, Isgur agreed. Tailored Brands, owner of the Subsidiaries Men`s Wearhouse, Moores Clothing for Men and K-G Fashion Superstore and Jos A. Bank, signed a restructuring agreement in August after announcing in July that it was downsizing and closing subsidiaries. “As evidenced by the positive results achieved in January and February, we have made considerable progress in refining our ranges, strengthening our Omni-Channel offering and expanding our marketing chain and creative mix. However, the unprecedented effect of COVID-19 requires that we continue to adapt and evolve,” said Dinesh Lathi, President and CEO of Tailored Brands. “An agreement with our lenders is a milestone on our path to becoming a stronger company with the financial and operational flexibility to compete and win in a rapidly changing retail environment.

The company received $500 million of other debt (DIP) from its existing lenders for revolving credit facilities. After approval by the Court of Justice, this financing will be concluded and made available to the company under certain conditions, in combination with the available cash (including approximately $90 million of limited cash agreed by the consenting Term Loan Lenders (as defined below), and the cash flows generated by the company`s day-to-day operations, should be sufficient to cover the operational and restructuring needs of the company. RSA also expects that after the company`s Chapter 11 development, DIP financing will be converted into a $400 million revolving credit facility by existing lenders. On Sunday evening, the men`s clothing dealer filed Chapter 11, the youngest victim of coronavirus. The company`s situation was compounded by its reliance on custom clothing and the weight of debt it had accumulated by buying Jos for $1.8 billion.