Tailored Brands is seeking a $75 million emergency loan from Silver Point Capital, its largest equity holder and one of its existing lenders, to avoid another bankruptcy, according to Bloomberg. The loan would be broken down into $25 million in funds that rank equal to an existing term loan, and $50 million of subordinated debt that would be converted to equity within three years at $1 per share, according to court documents.
The retailer, which operates under banners including Men’s Wearhouse and Jos. A. Bank, “has severely underperformed against the financial projections upon which its Chapter 11 plan of reorganization was based,” according to court documents. “Those projections continue to be at risk in view of current critical assumptions for near term performance which are based on the anticipated resumption of social gatherings such as proms and weddings as well as the return of office workers towards 2019 (pre-pandemic) levels beginning this spring.”
Tailored Brands plans to use the money to help execute its strategic plan, a Tailored Brands spokesperson told Bloomberg. Despite the trouble mentioned in the court documents, the retailer “has exceeded the forecasts shared with prospective investors in every week of the past two-and-a-half months,” according to the spokesperson.
Tailored Brands emerged from bankruptcy in December 2020 after the process eliminated $686 million of the company’s debt and made Silver Point its largest equity holder. The retailer was hit hard by both store closures and the massive decline in gatherings caused by the pandemic. It has put an emphasis on in-store innovation to adapt to the new retail landscape, including through a tech-driven concept store that features contactless measurements.