Diligent and deliberate. Those were the words used by Neal Black, chief executive officer of Jos. A. Bank Clothiers Inc., to describe the company’s approach to a possible merger with its rival, The Men’s Wearhouse Inc.
“Work is under way, but I cannot give you a timeline of when that work will be completed to enable us to give a thoughtful response,” Black said in his prepared remarks to discuss third-quarter earnings on Thursday morning. “I can assure you that we want to act expeditiously with the sole goal of delivering increased value for our shareholders, but not at the expense of distracting our management team during the most crucial selling period.” RELATED STORY: Role Reversal — Men's Wearhouse in Pursuit of Jos. A. Bank >>
In early October, news leaked out that Jos. A. Bank, with funding from Golden Gate Capital, had approached Men’s Wearhouse about acquiring the company for $48 a share in cash, or “what we saw is a very fair price, a 42 percent premium to where their shares had been trading, and we even subsequently said that we would be willing to discuss a potentially higher price if the Men’s Wearhouse board would be willing to provide us with the opportunity for limited due diligence and enter into good faith discussions,” Black said. “They rejected our initial proposal and then didn’t respond to us. Last week, we received an unsolicited nonbinding proposal — acquisition proposal from Men’s Wearhouse. So, despite the fact that they would not engage in discussions with us before, it seems they now agree that a combination of our companies makes sense. We immediately responded that our board of directors would evaluate the proposal from Men’s Wearhouse with the assistance of our financial and legal advisers and respond in due course.”
Black said that even if the Men’s Wearhouse deal doesn’t happen, the company will continue to seek acquisitions that will allow it to “leverage the core strength of our operating team and the infrastructure that we have built.” He said any acquisition — either within or outside the men’s retail space — would have to be a “strategic fit with our business, leverage our core competencies” and provide synergies that would create value over the long term, Black detailed.
“Even as we pursue this path, our management team remains keenly focused on continuing to grow our core business,” he said. “And we’re looking forward to being a strong competitor this holiday season and continuing to generate improvement in our performance.”
In the third quarter, the company returned to growth mode with improvements in profits, sales and margins.
In the three months ended Nov. 2, net income improved 2.3 percent to $13.6 million, or 49 cents a diluted share, from $13.3 million, or 47 cents, in the year-ago period. Excluding $1.2 million in legal and professional service fees incurred as a result of its pursuit of an acquisition of Men’s Wearhouse, adjusted earnings per share were 51 cents, 1 cent more than analysts, on average, had expected.
Sales, like profits, had been down during the first half of the year, but picked up 6.3 percent in the quarter to $247.5 million from $232.9 million a year ago. Comparable sales rose 2.4 percent, with a 0.1 decline in same-store sales offset by 23.5 percent growth in direct marketing revenues. Gross margin escalated to 57.4 percent of sales from 57 percent a year ago.
“Our performance in the third quarter is a strong indication that we are taking the right actions to improve both our top and bottom lines,” Black said.He added that the fourth quarter has gotten off to a strong start, with both same-store sales and direct marketing sales up in November. Black said units of suits — driven by slim silhouettes and big and tall — posted a strong increase in the quarter, while sportswear unit sales were flat and dress shirts and other clothing items declined. However, he said that despite a decrease in dress shirt units sold, the actual sales and margin figures were better since this category was “part of our plan to increase the penetration of the nonpromotional part of our business.”
EXCLUSIVE: Two and half months after John Targon, cofounder and codesigner of Baja East, was hired as creative director of the contemporary division at Marc Jacobs, he has left the company, WWD has learned. Marc Jacobs International, which is owned by LVMH Moët Hennessy Louis Vuitton, confirmed Targon’s departure in a statement: “John Targon is a talented designer and we appreciate the work he has done here. Ultimately working together did not make sense for the brand and we wish him the best.” Read the story by @jessiredale, link in bio. #wwdnews
@theluxurycollection is officially launching a collection, tapping Sofia Sanchez de Betak for the capsule. Over 30 styles will be featured in the Chufy x The Luxury Collection, debuting next month at Bergdorf Goodman, The Webster, FiveStory and more. De Betak, known as “@chufy,” drew inspiration for the collection from her trips to Japan in the past year #wwdfashion
@lhd, founder and CEO of @thewebster, has teamed up with @lebonmarcherivegauche for the European launch of her ready-to-wear line, LHD. The launch will come with an exclusive pop-up opening today that’s set to run through May 20. Located on the second floor, it carries her debut Miami-themed resort collection, launched in November as see-now-buy-now. #wwdfashion
@longchamp, which marks its 70th anniversary this year, just opened its biggest U.S. store on Manhattan’s Fifth Avenue. On the lower level there’s a floor-to-ceiling display of the brand’s iconic Le Pliage bag – in all of its different colors, shapes and sizes. Customers can also have their product personalized in-store by imprinting names, initials or emblems. #wwdfashion (📷: @ericmtownsend)
“Whenever I’m in that place of sound and music, I don’t have fear or nervousness…This album has a lot of themes of courage and boldness and I want to be the soundtrack for people’s lives. I’ll be so happy if [my songs] evoke strength in people, which I know music has done for me,” says @kimbramusic of her newest album “Primal Heart.” The New Zealand-born singer sat down with WWD to talk about her music, newest tour and connecting with hear fans — read more on WWD.com #wwdeye (📷: @jilliansollazzo)
Luxury handbag resale company @rebagofficial is planning to sell a rare collectible for $70,000: the @hermes White Crocodile Himalayan Birkin. The exclusive Birkin sold for about $100,000 in 2008, when @davidbeckham bought one for his wife @victoriabeckham to add to her collection. Read more about the rare Birkin on WWD.com #wwdaccessories
With her costume pearl necklace and what-you-see-is-what-you-get style, Barbara Bush, who died Tuesday at age 92, was a straight-shooter from start to finish.
Born Barbara Pierce in New York City, Bush served as the 37th first lady, as well as the country’s second lady from 1981 to 1989. In addition to being part of the longest presidential marriage — 73 years — Bush also had the unlikely distinction of having one son, George W., become the 43rd president and another son, Jeb, run unsuccessfully in 2016. Having served as second lady during the Reagan administration’s two terms and lived all over the world during her own husband’s ascending political career, Barbara Bush made it clear that literacy — not fashion — was her priority. Read more from Rosemary Feitelberg’s obituary on the late First Lady in WWD.com, link in bio. #barbarabush #wwdnews
Western and ’90s trends have influenced denim for fall 2018. Think raw, dark and coated jeans mixed with bold prints and tough leather. #trendtuesdays #wwdfashion (Styled by @thealexbadia;📷: @ryanplett)