Doug Ewert blinked — at least just a little.
While the chief executive officer of Men’s Wearhouse remains steadfast in his commitment to turn around the Jos. A. Bank division and break its destructive promotional cycle, that doesn’t mean the promotions are going away completely.
During a conference call with analysts Thursday morning, Ewert called the division’s former promotional strategy “toxic,” but said he realizes “the Jos. A. Bank customer responds to promotions and this will continue to be a promotional brand.”
“While we’ve removed the most destructive promotions — the buy-one-get-three or more free — we will continue to test, learn and listen to our customers to better understand what the optimal promotional strategy is that maximizes value for both the customer and the company,” he said.
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The ceo said the company is using buy-one-get-one-free (BOGO), and “at the moment, we’re even trying BOGO 2. We know that BOGO is very sustainable from our other businesses. We know that BOGO 3 is not sustainable and we’re testing the gray area in between.”
Late Wednesday, Men’s Wearhouse Inc. reported that net losses in the third quarter totaled $27.2 million, or 56 cents a share, compared with year-ago earnings of $6.8 million, or 14 cents. Results for the quarter included a $90.1 million impairment noncash charge against the value of the Jos. A. Bank trade name. Total sales for the three months ended Oct. 31 fell 2.8 percent to $865.4 million from $890.6 million. Comparable-store sales at the Jos. A. Bank division dropped 14.7 percent to $198.9 million in the third quarter and through the first week in December, the quarter-to-date comps at Bank were down a whopping 35.1 percent.
During the call, Ewert reiterated the company’s “unwavering determination to fix the profit model at Jos. A. Bank and relentless focus on turning around the business.”
In response to an analyst’s query about whether the company would consider selling or closing Jos. A. Bank, Ewert said, “We’re not anywhere near that. This is a core brand for us. It attracts a different customer than we see in any of our brands. This company is in our sweet spot from a strategic standpoint and we’re going to turn this around. We’re going to seek the right top-line level for healthy sustainable growth and we’re going to fix the profit model. That’s the best way to unlock value for our shareholders.”
He stressed some of the positives — or “green shoots” — at the division and said the customer is responding to newness, including the younger-skewed 1905 label, shoes and the newly added Joseph Abboud brand.
He revealed that the company is “in the early innings of expanding” the Abboud assortment at Jos. A. Bank and is working on an exclusive collection for just those stores. The label has become popular at Men’s Wearhouse stores and is expected to have sales of $400 million this year.
Ewert also said the company will work to improve the marketing and message it is delivering to the Jos. A. Bank customers in its attempt to get them to return to the stores.
“With the top line resetting to a lower level for the near term,” Ewert said, “we’re fully engaged in all elements of repairing the Jos. A. Bank profit model. We’re looking at every opportunity for cost reduction, including store rationalization, labor, advertising, and all relevant shared service costs.”
He did not disclose the number of Bank stores that could be closed, saying only that 20 percent of the company’s entire fleet is “up for some sort of action each year,” and the corporation is “looking at the entire portfolio of brick-and-mortar for opportunities for consolidation and improving the leverage.”
He said Men’s Wearhouse will provide its next update on the business in February .