[NEW YORK] Another icon of luxury goods and Wall Street culture may be headed for the bankruptcy auction block, with Authentic Brands Group and mall landlord Simon Property Group in talks to buy Brooks Brothers.
Authentic and Simon would team up to bid for the two-century-old chain after a potential Chapter 11 filing by the retailer, according to people with knowledge of the talks. They asked not to be identified because the process is private. Authentic has a history of buying well-known brands that have fallen on hard times, and Simon, the nation's biggest mall landlord, has a stake in keeping its prime tenants in business.
It's been a tough few years for high-end goods, even before the Covid-19 outbreak forced Brooks Brothers to temporarily close its stores. Retailers including Barney's New York Inc., Neiman Marcus Group and Dean & DeLuca have gone bust as shoppers shunned malls in favour of online outlets. "These aspirational-type brands can expect a bumpy year ahead," said Bloomberg Intelligence analyst Deborah Aitken, who monitors the luxury market. The Brooks Brothers brand hasn't made"enough of a transition to leisure, street and athletic wear."
Relaxed dress codes also hurt Brooks Brothers, with suits and ties no longer the standard even at blue-chip corporate offices, top Wall Street brokerages and white-shoe law firms where Brooks Brothers clothing was once a status symbol. It didn't help that the pandemic pushed would-be customers to work from home and forced the cancellation of weddings and other formal events, cutting down on demand for new clothing.
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