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Could New $20M Loan Save 3 Brooks Brothers Factories?

Brooks Brothers is considering closing three apparel factories that have long played into its Made-in-America heritage, though a new $20 million cash infusion could dictate the fate of Brooks Brothers’ USA-made footprint.

America’s oldest clothing retailer confirmed it is looking into possible closures at several manufacturing facilities along the East Coast.

“In the ordinary course of business, Brooks Brothers consistently explores various options to position the company for growth and success,” a spokesperson for the classic American clothier told Sourcing Journal. “As part of this assessment, it is possible that we will be closing our factories in Long Island City, N.Y., Garland, N.C., and Southwick, Mass.”

The upscale retailer delivered Worker Adjustment and Retraining Notification (WARN) notices to the impacted employees in order to provide them with sufficient time to prepare for potential loss of employment, the spokesperson said. According to WARN reports for the three states where factories could close, as many as 695 Brooks Brothers workers are facing job losses.

“This decision is subject to change, should alternative solutions be uncovered in the near-term,” said the spokesperson for Brooks Brothers, which has more than 250 stores in North America and 500 worldwide in 45 countries. “The factories are incredibly meaningful to our heritage and we value our employees. All opportunities on the table are still being explored to avoid this difficult outcome.”

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An industry source who did not want to be identified told Sourcing Journal a company has expressed interest in taking over the Southwick facility to expand capacity. Brooks Brothers purchased the 70-year-old manufacturer in 2008 to build a state-of-the-art suit-making factory in nearby Haverhill in 2009.

The spokesperson said the majority of Brooks Brothers’ manufacturing resides outside of these three facilities “and our supply chain is diversified and strong. We remain well-positioned to serve customers.”

At the end of March, Brooks Brothers said it was converting these at-risk factories, which typically produce ties, shirts and suits, to manufacture face masks and gowns critical to combating the coronavirus crisis. The clothing maker said it planned to use these facilities to produce up to 150,000 masks per day on an ongoing basis, to help increase access to protective gear for health care workers at the nation’s hospitals and other facilities.

On March 30, Brooks Brothers said factory personnel who will be making the masks were set to return to their jobs following a two-week precautionary self-quarantine.

On Thursday afternoon, Brooks Brothers landed a $20 million secured term loan facility loan from Gordon Brothers, the New York City-based restructuring and investment firm known for working with brands in need of a revival. Ramez Toubassy, Gordon Brothers’ president of brands, said the American brand is “positioned to thrive for the long run.”

The loan gives the clothing chain the resources to “execute upon our operating plan,” Steven G. Goldaper, executive vice president and chief financial officer for Brooks Brothers Group, added.

Brooks Brothers did not immediately respond to requests for comment on the new loan. The funding infusion, however, could be instrumental in ensuring the factories survive the coronavirus downturn and keep the label’s roots in American manufacturing alive for the next generation.