The Men’s Wearhouse Inc. has quietly launched a trade-up offensive as it’s fended off its Jos. A. Bank Clothiers Inc.’s takeover effort and then initiated its own attempt to buy its archrival.
Speaking on the company’s third-quarter conference call Thursday morning, Douglas Ewert, president and chief executive officer of Men’s Wearhouse, detailed how its July acquisition of the Joseph Abboud name, trademark and New Bedford, Mass., factory for $97.5 million has enabled it to begin offering custom-made Abboud suits, replete with U.S. pedigree, for $595 and $695. Abboud is MW’s chief creative director.
“Men’s Wearhouse has really only sold about 100,000 [suits] a year at price points above $400 out the door,” he told analysts on the call. “So we see it as a significant opportunity to gain share in that space as we not only trade up existing Men’s Wearhouse customers but attract new customers to shop with us.”
He said that, in just the last three weeks, the company has delivered suits from the New Bedford factory to about 250 of its 658 MW stores and placed custom clothing in 100 of them.
“The early read is very encouraging,” he said. “Throughout the coming spring season, we’ll expand the availability of these products into all our Men’s Wearhouse and [Canadian] Moores stores market by market and introduce complementary Joseph Abboud style, quality and value in other categories including sportswear, furnishings, shoes and tuxedo rental.”
The ceo’s focus was clearly on merchandising. Ewert told his listening audience that he would not take questions about MW’s offer late last month to acquire Jos. A. Bank for about $1.2 billion and indicated there was “nothing to report at this time” about the company’s strategic review of its K&G division.
He practically gushed, however, in discussing merchandising and marketing initiatives that contributed to a 2.6 percent increase in comparable-store sales during the third quarter.
“Slim-fit products now represent 43 percent of overall retail sales and 47 percent of suit sales,” he said. “Our tuxedo comps continue to be positive. Our premium Vera Wang tuxedos have grown to represent approximately 30 percent of our rental business.”
MW is in the process of making its in-store inventories available to visitors to its Web site, he pointed out, adding that “in the next few months” the company will be able to deliver products to consumers in more than 100 countries outside the U.S. and Canada.
The company late Wednesday reported a 21.8 percent decline in profits for the three months ended Nov. 2 to $38.2 million, or 79 cents a share. Stripping out costs of the Joseph Abboud acquisition, earnings per share were 90 cents, 4 cents higher than the average estimate of Wall Street analysts. Sales rose 2.8 percent to $648.9 million.
The company’s shares Thursday rose 2.9 percent to $51.91.