The promotional posture instituted at The Men’s Wearhouse at the end of last year continues to pay dividends. On Wednesday, the Houston-based company reported second-quarter profits rose more than 20 percent despite a decline in sales. In addition to aggressive promotions — buy-one, get-one-free suit sales, and now buy one, get the second for $100 — the strong showing was also driven by a double-digit decline in expenses. In a conference call, George Zimmer, chief executive officer, told analysts, “In the fourth quarter of 2008, we learned that at Men’s Wearhouse and Moores [the company’s Canadian chain], a highly promotional strategy was effective in driving unit sales and gaining market share in our dominant clothing category, suits. Therefore, facing the ongoing challenging macroeconomic environment, we planned our 2009 business accordingly.” Zimmer said the company’s departure from its “historic path of everyday low prices has been as successful as it was gut-wrenching to implement. So I’m encouraged and confident that the changes we have made and continue to refine in our pricing and marketing strategies are creating value that our customers are responding to very positively.” Zimmer said according to industry estimates, unit sales of suits in the U.S. for the first half of 2009 were down in the double digits from the prior year. At Men’s Wearhouse, however, “our suit business in dollar terms is up 4.1 percent, and in unit terms, up 23 percent. Clearly we are growing our market share.” Turning to tuxedo rentals, Zimmer said although wedding rentals are “soft, if not slightly down year-over-year,” the company’s sales rose 1.7 percent in the quarter, indicating the retailer is gaining market share here as well, “albeit at a slower rate than tailored clothing,” Zimmer said. At the MW Tux stores, the company continues to add other categories to increase sales, including casualwear such as jeans and T-shirts. Zimmer said some stores are doing well with that merchandise, while others are struggling. “So we will continue to investigate other ways to stimulate sales in our tuxedo rental stores.” Turning to its K&G division, Zimmer said the stores “significantly outperformed their volume targets for the first half of the year, with a 7.5 percent increase over plan in sales per gross square foot. Our increase over plan is a result of a significant improvement in our ladies’ business, upgrades to our store look and feel and an increased marketing spend and brand awareness.” Responding to a question from an analyst about a report that competitor Jos. A. Bank Clothiers is considering entering the tuxedo rental business, Zimmer said. “We welcome the competition, but I would say they should think this through very carefully.” Neal Black, the current ceo, responded to WWD: “We have several growth initiatives under investigation for 2010 and beyond. We have always had an interest in all aspects of the formalwear business and we have a significant existing business in tuxedo sales. We have not made any announcement about tuxedo rentals but if we were to do so, it would be with a full and complete understanding of the competitive market.” In the three months ended Aug. 1, net income hit $39.5 million, or 75 cents a diluted share, 20.3 percent above the $32.8 million, or 63 cents, achieved in the second quarter of 2008. The results easily passed both analysts’ consensus estimates for earnings per share of 61 cents a share and the company’s guidance of between 56 cents and 60 cents provided on June 8. Sales fell 3.5 percent to $526.2 million from $545.3 million in the year-ago quarter with same-store sales dropping 2 percent at Men’s Wearhouse, 3.6 percent at K&G and, in Canadian dollars, 3.4 percent at Moores. Gross margin fell to 45.2 percent of sales from 46.4 percent a year ago.In initial guidance for the third quarter, the company said it expected earnings of 27 cents to 30 cents a diluted share, below the consensus estimate of 32 cents, on a 2 to 3 percent decline in same-store sales in its retail business and a 1 to 2 percent increase in same-store rentals for tuxedos. Zimmer said, “The reality is our business tends to lead the decline in business cycles and lag during the upturn.”Year-to-date profits rose 4.6 percent to $44.7 million, or 85 cents a diluted share, while sales were down 4.4 percent to $990.3 million from the $1.04 billion registered in the first six months of 2008.
Exclusive: @isabelmarant and @lorealmakeup have teamed up to create a capsule makeup collection. "She is rather natural in the day but doesn't have time to go back home before going out [in the evening] and redo her entire beauty look," said Marant on the 5 products included in the collection, which will launching in September. Read @jenniferbethweil's interview with the designer on WWD.com. #wwdnews #wwdbeauty
After 17 years, Tomas Maier is leaving @bottegaveneta. “I am deeply grateful to him and I personally thank him for the work he accomplished, and for the exceptional success he helped to achieve,” said François-Henri Pinault, head of parent company @kering_official. Head to WWD.com for more on his departure. #wwdnews #wwdfashion (📷: Davide Maestri)
@shaymitchell is no stranger to teaming up with beauty brands, but she’s made her latest partnership official: She’s signed with @buxomcosmetics as global creative brand ambassador, WWD learned exclusively. Mitchell and Buxom will collaborate on campaign development, social media strategy and content and new product and shade development. Read more on WWD.com. #wwdbeauty (📷: @clint_spaulding)
Today we’re at the WWD Retail 20/20 Forum where industry leaders will be talking about the future of shopping for fashion, footwear and beauty. Tune in on Instagram Live at 9 am and 3:30 pm to hear from two of our speakers –– @therealreal’s Rati Levesque and @bandier’s Stephen Ippolito. #wwdsummits (📷: @elizaflorendo)
Seen last night at @coach’s launch party for “Life Coach,” an interactive pop-up in Soho: @joansmalls. Open now, visitors of the pop-up can engage in themes of “creativity and self-expression,” through tarot, carnival games, live performances and art. See the rest of the party pics on WWD.com. #wwdeye (📷: @vnina)
“We figure there’s enough cynicism to go around the world right now let’s go out there and be ourselves, let’s be enthusiastic, let’s have positive energy, which is something I think a lot of people really want and need right now,” said musician @joshgroban ahead of hosting the Tony Awards with @sarabareilles. Read @leighn’s interview with Groban on how he picked his look for the night, his next record and more on WWD.com. #wwdeye #tonyawards (📷: @vnina)
“Rock as an attitude and not a uniform. Street as a style and not just clothing. Sportswear as the new normality,” @paul_surridge said of his first @roberto_cavalli men’s wear collection, previewed here. The British designer joined the brand as the creative director in May 2017, and is gearing up to unveil his debut for the label with a runway show at the Florence Charterhouse on June 13 at #PittiUomo. Head to WWD.com to read more about his collection and see more sneak peek photos. #wwdfashion (📷: @simonelezzi)