On the day of The Men’s Wearhouse Inc.’s annual meeting at the Fairmont Hotel here Wednesday morning, the company completed the long-awaited acquisition of its competitor, Jos. A. Bank Clothiers Inc.
“We’re off to the races,” Doug Ewert, president and chief executive officer, told WWD following the meeting.
The acquisition was completed through an all-cash tender offer for the outstanding shares of Jos. A. Bank common stock at $65 each. The tender offer expired at midnight on Tuesday, New York time, with 23.6 million shares validly tendered.
The combined firms together have more than 1,700 stores, 26,000 employees and sales of $3.5 billion on a pro forma basis.
Ewert said that because the businesses have distinct customer bases, they will be kept separate. And Banks’ famed buy-one-get-three-free suit promotion, which was discontinued in March, won’t be coming back.
“I don’t think long term that is very sustainable pricing,” Ewert said. “We’ll work to rationalize their pricing strategies as we try to develop more sustainable pricing for that brand, which they have already started. They’ve had nice positive comps for the last three quarters, and what they attribute it to is they have been weaning off those deep discounts.”
The promotions were so over the top that “Saturday Night Live” actually spoofed the company, saying the suits are cheaper than paper towels and ideal for mopping up spills.
“I’ve seen it,” Ewert said with a chuckle. “I’m glad that wasn’t on my watch.”
The annual meeting was short and sweet, clocking in at eight minutes as shareholders approved the reelection of eight board members and the new executive compensation package.
Afterward, Ewert said that Men’s Wearhouse’s suit business is good.
“We’re pleased with the slim fit, which is now representing over 45 percent of our total apparel business,” Ewert said. “We’re in the middle of launching the Joseph Abboud [Heritage] collection, which is in a little over half our stores now, and we’re very pleased with the progress for that. It’s not just tailored clothing — it’s all other categories as well.”
The company has about 650 full-line Men’s Wearhouse stores in the U.S. and another 120 in Canada, which just received the Abboud collection two weeks ago, he said. Every store that has the brand also offers Abboud’s new made-to-measure suit program, which is also performing well, he said.
All stores will eventually carry the Abboud apparel, he noted.
Ewert said the acquisition of Bank will be “accretive to our earnings in the first full year of operations [and] achieve $100 million to $150 million of run-rate synergies by the end of fiscal 2016.”
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