Tailored Brands is cutting 20% of its corporate staff and has identified up to 500 retail stores for potential closure as it struggles to strengthen its financial position. For the time being, however, 96% of the retailer’s approximately 1,400 stores — operating under the Men’s Warehouse, Jos. A. Bank, Moores Clothing for Men and K&G brands — have returned to operation after closing due to the pandemic.
The reduction in corporate positions is set to be completed by the end of the company’s fiscal Q2 on Aug. 1, 2020 and it will record a pre-tax charge of approximately $6 million in the quarter for severance payments and other termination costs.
In addition, “the company has re-evaluated the forecasted profitability and strategic value of every store in its fleet relative to current and anticipated trends in consumer demand and has identified up to 500 stores for closure over time,” according to a release.
Tailored Brands Appoints Chief Restructuring Officer
Tailored Brands reported last month that it might be “forced to scale back or terminate operations and/or seek protection under applicable bankruptcy laws,” and has appointed Holly Etlin, a Managing Director at AlixPartners, to the newly created role of Chief Restructuring Officer. Etlin has been working as an advisor to the executive team and Board of Directors since late March and “will help us continue to build a strong future for our company,” said Dinesh Lathi, Tailored Brands President and CEO in a statement.
Jack Calandra, Executive VP, CFO and Treasurer is exiting Tailored Brands as of July 31. His responsibilities will be divided between Lathi and Etlin.
“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,” Lathi said. “Unfortunately, due to the COVID-19 pandemic and its significant impact on our business, further actions are needed to help us strengthen our financial position so we can navigate our current realities.”
Ulta Beauty Continues To Grow Store Count
Although Ulta Beauty announced that it would permanently close 19 stores by Nov. 7, 2020, the retailer expects to end the year with a net increase as it relaunches its store opening program. Ulta Beauty plans to bring approximately 30 new stores online, starting in August and continuing through the remainder of fiscal 2020. After opening 11 locations and closing one during Q1, store openings were put on hold in Q2 due to the pandemic.
“We anticipate COVID-19 will influence longer-term market shifts and create new real estate opportunities, supporting our ambition to ultimately operate between 1,500 to 1,700 Ulta Beauty stores in the U.S.,” said Mary Dillon, CEO in a statement. “To do so, we are proactively optimizing our real estate portfolio and have made strategic decisions to temporarily reduce new store openings and close a limited number of stores this year.” Ulta currently operates 1,264 stores.
Although store opening plans have not been finalized for Ulta’s 2021 fiscal year, the company anticipates that it will continue to grow its store count in the U.S. and enter the Canadian market in mid-2021.
Ulta completed its post-shutdown phased reopening process on July 20 and has reactivated approximately 50% of the associates furloughed in April.