The parent company of Men's Wearhouse announced a round of layoffs and hundreds of looming store closures Tuesday, as its business suffers a blow from the coronavirus pandemic.
Tailored Brands said it is eliminating roughly 20% of its corporate workforce by the end of its fiscal second quarter. It also said it has selected up to 500 stores that it could close "over time." It did not disclose locations.
It also announced that CFO Jack Calandra will depart the company on July 31. In the near term, it said Calandra's responsibilities will be divided between its CEO and Holly Etlin, a managing director at AlixPartners, who has been appointed to a new chief restructuring role for Tailored Brands.
"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," said Tailored Brands President and CEO Dinesh Lathi.
"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," he said.
Earlier this month, Tailored Brands skipped a $6.1 million payment to bondholders, triggering a 30-day grace period.
With the layoffs, Tailored Brands said it expects to record a pretax charge of roughly $6 million in the second quarter for severance payments and other termination costs, all of which are cash expenses. It said it has not yet quantified how much it will save from the store closures.
In addition to Men's Wearhouse, Tailored Brands operates Jos. A. Bank, Moores Clothing for Men and K&G.
As of Feb. 1, the company had 1,450 U.S. stores.
Tailored Brands shares, which trade under $1, were up 4.3%. The stock has fallen more than 83% this year. The company has a market cap of $34.1 million.
Correction: An earlier version misspelled Wearhouse.