A Men's Warehouse Inc. store in San Francisco, California.

Photographer: David Paul Morris/Bloomberg

Photographer: David Paul Morris/Bloomberg

Tailored Brands Inc., the owner of Mens Wearhouse and Jos. A. Bank, is preparing a bankruptcy filing that would shutter 400 to 500 stores after the coronavirus lockdown kept Americas office workers at home and stifled demand for new suits.

The filing, which could come as soon as this weekend, will give the retailer a chance to cut its borrowings and close unprofitable locations, according to people familiar with the matter. The plan calls for asset-based lenders to provide the company with a loan to keep it operating through the court process, the people said. They asked not to be identified discussing a private matter.

The retailers shares dropped 12% to new lows on Friday to about $0.34 as of 10:00 a.m. in New York. Its term loan due 2025 trades at less than 20 cents on the dollar, according to Bloomberg data, while bonds due in 2022 were last quoted around 2 cents, according to Trace.

Tailored Brands said this week it was unlikely to make good on a July 1 missed bond payment and probably would file for bankruptcy during its third fiscal quarter, which starts Aug. 2. Term-loan lenders would see part of their holdings exchanged for equity in a reorganized company, with as much as half the $877 million loan reinstated as take-back paper, according to the people.

A representative for Houston-based Tailored Brands didnt return messages seeking comment. The company, which counted 19,300 employees in last years annual report, is getting advice from restructuring lawyers at Kirkland & Ellis and investment bank PJT Partners.

Tailored Brands would be the latest in a string of retailers that have sought court protection amid the pandemic. Lockdowns have drained revenue, pushing already-struggling companies like J.C. Penney & Co., J. Crew Group Inc. and Neiman Marcus Group Inc. into bankruptcy.

Like those three, Tailored Brands was in a tough spot before the outbreak. Sales have fallen every year since 2016 as Mens Wearhouse and Jos. A. Bank contended with changing consumer tastes and e-commerce rivals.

The coronavirus made things worse by keeping office workers at home, all but eliminating the need for suits and ties. The outbreak also postponed events such as weddings and other celebrations, cutting into sales of formal wear.

Tailored Brands reopened just under half of its roughly 1,445 stores as of June 5, according to a June 10 statement. All of them, as well as e-commerce distribution centers in the U.S. and Canada, were temporarily closed in the first quarter.

Last week the company said Chief Financial Officer Jack Calandra will leave on July 31. His responsibilities will be divided between Chief Executive Officer Dinesh Lathi and Holly Etlin, a managing director at AlixPartners who was recently appointed chief restructuring officer.

(Updates with share price in the third paragraph.)

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Mens Wearhouse Parent Said to Prepare Imminent Bankruptcy - Bloomberg