Tailored Brands Announces Plans to Reduce Headcount and Close Stores; Outlines Leadership Changes
Tailored Brands, Inc. (NYSE: TLRD) today announced that, as a result of the unprecedented and industrywide business disruptions resulting from the coronavirus pandemic, it is implementing a series of operating and organizational changes.
Specifically, the Company will make organizational changes that will result in the elimination of approximately 20% of its corporate positions by the end of the fiscal second quarter. In addition, the Company has identified up to 500 retail stores for potential closure as well as associated opportunities to reduce and realign its store organization and supply chain infrastructure and organization to best serve its go-forward store footprint and e-commerce business. These changes are designed to strengthen the Company’s financial position and enable it to compete more effectively in the challenging retail environment.
Tailored Brands President and CEO Dinesh Lathi said, “We have safely reopened almost all of our retail stores and look forward to helping our customers look and feel their best for their moments that matter. 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. It is always difficult to eliminate jobs and say farewell to our friends and colleagues. I want to thank our teammates affected by these changes as well as those who continue to help us meet the challenges currently facing our industry and who remain dedicated to serving our customers.”
Lathi added, “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.”
In connection with these corporate personnel changes, the Company expects to record a pre-tax charge of approximately $6 million in the second quarter of fiscal 2020 for severance payments and other termination costs, all of which are cash costs.
The Company also announced that Jack Calandra, Executive Vice President, Chief Financial Officer and Treasurer, will leave Tailored Brands as of July 31. In the near term, Calandra’s responsibilities will be divided between Lathi and Holly Etlin, a Managing Director at AlixPartners who has been appointed to the newly created role of Chief Restructuring Officer, reporting directly to Lathi. Etlin brings more than 30 years of restructuring experience and a deep expertise in retail, and has been working closely with the executive team and Board of Directors as an advisor since late March.