ENFIELD, Conn. – The bones of Brooks Brothers stores are spread over 100,000 square feet here in a warehouse near the Massachusetts border, mixed with a sea of cardboard boxes and trash.
There are legions of mannequins, empty round tables that once stood on ties, posters of horse riders from bygone times. There are a number of Christmas trees and tons of gold-painted sheep ornaments hung on a ribbon – a symbol of the Brooks Brothers since 1850 known as the Golden Fleece. Empty tailor order forms are scattered around. A neon sign that seems to be still working. There are no clothes to be found, but there are rows of heavy sewing machines that most likely came from one of the brand’s recently closed factories. And in the bathroom, next to a toilet, there is a welcome rug with Brooks Brothers in italics.
The entire bulk was abandoned here in the wake of the Brooks Brothers bankruptcy filing and sale last year. This was the waste of a retailer who had nearly $ 1 billion in sales in 2019. Since then, the couple who own the camp, Chip and Rosanna LaBonte, have been trying hard to figure out how to get rid of everything. Junk removal companies have told them that clearing the room Brooks Brothers rented through November will cost at least $ 240,000. In order to pay the bill, the LaBontes have to sell their house.
The couple’s plight highlights the far-reaching consequences of retail bankruptcies that cascaded during the pandemic, affecting everyone from factory workers to executives. Smaller vendors and landlords have often held the short end of the stick during lengthy Byzantine bankruptcy proceedings, particularly with restrictions on what they can spend on legal bills compared to larger businesses. And once bankrupt brands are sold, people like the LaBontes are usually left in the dust.
“It is a very sad situation that unfortunately happens quite often as it is only part of the bankruptcy situation when the law is being drafted,” said James Van Horn, partner and individual bankruptcy specialist at Barnes & Thornburg. “Unfortunately, creditors can be victims and sometimes they have little or no means of getting back what is owed them.”
Retailers like Brooks Brothers led the way among the more than 600 corporate bankruptcies in the US last year, according to S&P Global Market Intelligence, which had the highest number of filings in a decade, according to S&P Global Market Intelligence.
The LaBontes, who are in their sixties, have been working with a liquidator to sell what they can of the Brooks Brothers Detritus and are in the process of listing their home in Sherborn, Massachusetts. While they filed a lawsuit in the bankruptcy court, it is they who I expect to receive less than 5 percent of the amount owed if it does – admitting the process is hopelessly confusing. Most of all, they are angry and incredulous about the situation, especially as Brooks Brothers continues to operate under wealthy new owners.
“We know how to go out of business and bankruptcy, but throw your problem on us and walk away and cause us these cleanup costs?” Mr LaBonte said in an interview in Enfield. “Nobody would expect such an expense – we have no money for rainy days to cope with.”
The couple bought the warehouse in 2010. They said it was their first foray into commercial real estate and they had previously worked on housing projects. They have other tenants and a self storage area but are frustrated with the clutter and the fact that they cannot use the space for other purposes until it is cleared.
Brooks Brothers, which was founded in 1818 and is the oldest continuously operating apparel brand in the United States, began leasing its warehouse in Enfield in 2011, most recently at a cost of around $ 20,000 per month. (Brooks Brothers also has a corporate office and distribution center in Enfield.) The building, which spans approximately 375,000 square feet, is owned by the LaBontes through KBRC Realty. It is the company’s sole stake and the couple’s main source of income.
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April 2, 2021, 3:58 p.m. ET
The office wear segment of the entire retail trade was hit last year as many Americans worked remotely and dumped entire sections of their closets. J. Crew and the owners of Ann Taylor and Men’s Wearhouse also filed for bankruptcy while sales at chains like Banana Republic faltered. Temporary store closings added to the emergency, along with the cancellation of special occasions like proms, graduations, weddings and other events.
All of this led to Brooks Brothers filing for bankruptcy in July, one of the most significant retail slumps of 2020. Brooks Brothers had attracted all but four US presidents at the time of filing and was proud of its American factories, which were forced to shut down.
Investors saw value in the brand, however, and the retailer was quickly bought by Simon Property Group, the largest US mall operator, and Authentic Brands Group, a licensing firm, for $ 325 million.
The firms have acquired a number of bankrupt retailers through a joint venture called SPARC Group, including Lucky Brand Denim and Forever 21, using the combination of Authentic Brands’ expertise in licensing famous brand names in a variety of lucrative and creative (and some) areas say share-destructive) ways and Simon’s real estate portfolio.
At the time of the Brooks Brothers purchase, SPARC was committed to operating at least 125 Brooks Brothers retail locations, compared to 424 retail and outlet stores worldwide prior to the pandemic.
Under the new owners, Brooks Brothers switched to wire transfers instead of checks, but continued to pay rent for the warehouse through November and sent even more goods there when it closed dozens of stores and closed its three American factories, Mr and Mrs LaBonte said. But after Thanksgiving, they sent the couple a letter denying the lease and the contents of the camp. According to one person knowledgeable of the deal, the warehouse and its contents were not part of SPARC’s purchase of Brooks Brothers. As a result, said Mr Van Horn, the new owner most likely has no legal responsibility to the LaBontes.
A SPARC representative has stopped returning requests for comments.
“They used it on all of their store fixtures, so tables, props, fishing poles, canoes, anything you would see would go in and out of a store to decorate,” LaBonte said. “There are probably 20,000 square meters of Christmas trees – everything but the actual goods.”
Who would want it now? Customers include local clothing manufacturers looking for mannequins and a set designer from the upcoming HBO series “The Gilded Age.” Last Monday, an elderly couple walked across the room looking at the Christmas decorations and empty gift boxes. Habitat for Humanity has been dealing with the transportation for several days and is picking up some of the goods. Still, Mr. LaBonte estimated that about 30 percent of the leftovers were sold.
The liquidator paid the LaBontes about $ 20,000 to sell what they can by mid-April or so. The couple will not get a cut and will take care of what is left. When garbage disposal specialists assessed the cost of clearing the room in December, one offer was around $ 243,000 while the other was closer to $ 290,000.
“We’re just another Covid victim for them, we understand that,” Ms. LaBonte said of Brooks Brothers. “But I don’t think they realized how much stuff there was either.”
The garbage disposal companies that confirmed the prices with the New York Times said it was expensive to remove the volume of goods. The cost included labor, multiple trips to landfills, donation and recycling centers, and the use of specialized equipment like a forklift, large dumpsters, and an 18-foot van.
“I’ve been doing this for seven years and I’ve never seen anything like it,” said Rick McDonald Jr., the owner of EastSide Junk, who made the $ 243,000 offer available to the couple. “You left an astronomical amount of things behind.”
When licensing firm Authentic Brands announced the purchase of Brooks Brothers out of bankruptcy last year, Jamie Salter, the company’s managing director, spoke about the retailer’s legacy and its “incredible story”.
The LaBontes, faced with a warehouse with part of this story, were unhappy to see these comments.
They recently issued a statement asking, “What inheritance can you claim if you act like low-rent bullies who fly at night?”
Contact Sapna Maheshwari at sapna@nytimes.com or Vanessa Friedman at vanessa.friedman@nytimes.com.
