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.”
“Azzedine has been one of the biggest influences in my life. He has always been such a strong, loving, fatherly figure to me. I call him Papa. His designs are indescribably unique, they are pieces of art. He knew how to make the female form look its loveliest. I have so many memories of him; my favorite might be during my first show with him in Paris. He liked me and he wanted to help me get more work. He called all his friends at Kenzo and Comme des Garcons, and asked them to book me. They said, ‘But she can’t walk!’ And he said, ‘but she has such a great ass!' His friendship and support has been the great privilege of my career. I can't imagine life without him. Repose en paix mon Papa.” - @stephanieseymour tells @wwd. #wwdfashion (📷: @steveeichner) #alaia #azzedinealaia
Azzedine Alaïa, flanked by two of his closest friends, models Stephanie Seymour and Naomi Campbell.
He designed Seymour’s dress for her 1995 wedding to Peter Brant, and treated Campbell (who famously called him Papa), like a daughter. For more on the legendary designer, tap the link in bio. #wwdfashion #alaia #azzedinealaia
Azzedine Alaïa's “I-did-it-my-way” ethos stood out starkly at a time when brands are experimenting with consumer-facing fashion shows, coed formats and trans-seasonal collections – anything to perk up lackluster sales of ready-to-wear in an age of Insta-everything. “It’s not creation anymore. This becomes a purely industrial approach,” the late designer told WWD in an interview last year. “But anyway, the rhythm of collections is so stupid. It’s unsustainable. There are too many collections.” Read more about the iconic designer’s life and work on wwd.com, link in bio. #wwdfashion #azzedinealaia (📷: @WWD Archive, 1986) #alaia
Sneaker reselling app @goat’s latest exhibit, "The Greatest: New York," tells the story of New York's sneaker culture. To celebrate the exhibit, an intimate crowd gathered on Thursday night at the pop-up gallery space, located at Platform in Culver City, to hear guest speaker and illustrator @esymai talk about her own rise in streetwear and women in the business. "For me I'm just someone who is creative. I like to create things," said Chang. #wwdfashion
Azzedine Alaïa, one of the most iconic couturiers of the modern era whose body-con designs defined Eighties fashion, has died in Paris. The diminutive Tunisian-born designer, known for his structured knitted dresses with fitted waists and impeccably cut, figure-hugging second skin silhouettes was deeply admired by his peers, and counted supermodel Naomi Campbell - his adoptive daughter - among his inner circle, one of a gang of glamazons including Farida Khelfa, Carla Bruni and Stephanie Seymour who became ambassadors of his style. (📷: Alexandre Guirkinger) #wwdblast