Tailored clothing has been the backbone of the men’s wear business for decades. But the complexion of the category has changed dramatically as made-to-measure offerings and sport coats gain in popularity, especially among Millennials.
A spot check of men’s retailers during the holidays found that suits were not performing well, but that is not surprising since the item is not generally seen as a gift. Even so, Ken Giddon, president of Rothmans, a New York-based men’s retailer, said “the suit business hasn’t been great all season,” and Bob Mitchell, co-chief executive officer of Mitchells, said off-the-rack suit sales have been lagging custom.
The state of the business is showing in the numbers. According to NPD Group’s Consumer Tracking Service, U.S. sales of men’s tailored clothing declined 8 percent to $4 billion in the 12 months ending October 2018. Suits represented 47 percent of these sales, or $1.9 billion, and were down 6 percent from the prior year. Suit separates, which accounted for 19 percent of sales, experienced double-digit declines in the 12 months ended in October.
And despite colloquial evidence to the contrary, sport coat sales also fell in the year, dropping 7 percent through October. This category accounted for more than one-third of sales.
During its third-quarter earnings call in December, Tailored Brands, a major player in tailored clothing and the owner of Men’s Wearhouse and Jos. A. Bank stores, said comparable-store sales at Men’s Wearhouse started “decelerating” in the third quarter, a trend that continued into the beginning of the fourth quarter. The company attributed this to declining sales of off-the-rack suits and is expected to result in an overall low-single-digit decline in the fiscal fourth quarter.
What is working for Tailored Brands is the custom business. Executive chairman Dinesh Lathi said that for the third quarter of 2018, custom sales averaged more than $5 million a week, an increase of 150 percent compared with $2 million a week for the same period a year ago. And custom suits now account for 20 percent of all suits sold at Men’s Wearhouse, Jos. A. Bank and the Moores nameplate in Canada.
To help accelerate sales, the company is now offering standard three- to four-week delivery for entry-level custom suits as well as a seven-day turnaround on select models that retail for $395 under the Custom Express program.
To boost non-custom sales at Men’s Wearhouse, Lathi said the company is heightening its promotional activity, a strategy that is intended to “drive higher suit-purchase-intent traffic into our stores. And while it’s still early days, we’re encouraged by some of the preliminary results that we’re seeing,” he said.
Jos. A. Bank, in contrast, is having better success with non-custom clothing sales, he added.
Lanier, a division of Oxford Industries that produces tailored clothing, is also seeing a downturn in off-the-rack clothing sales.
In the third quarter, the company reported that it experienced “some unexpected softness in some of its replenishment business, which is continuing into the fourth quarter,” according to chief executive officer Tom Chubb. He said the replenishment business is usually centered around the department stores. Chubb said Oxford is experiencing “the big retailers just sort of stepping on the inventory brakes a little bit.” He was certain that sales will rebound “fairly quickly,” he said.
Not surprisingly, John Tighe, president of Peerless Clothing, the country’s leading tailored clothing manufacturer, is more upbeat about the future of the business, thanks to strength in suit separates and sport coats in particular.
“Our tailored clothing business is very good at most of our [retail] partners,” he said, adding that Macy’s “has called out tailored clothing as a top business for five quarters in a row.”
He said that with fewer guys now wearing suits to work, the business is being driven by occasion dressing. “It used to be that they’d buy five replacement suits, but now they’re buying for a wedding or event.”
Helping boost sales, he said, are all the technical fabrics that are infusing stretch and performance attributes to the tailored clothing. “The customer likes that,” he said.
Also helping Peerless, Tighe said, is the fact that it is the licensee for many high-profile brands such as Ralph Lauren, Tommy Hilfiger, Michael Kors and Van Heusen. “We have all the important brands and that helps keep our business going,” he said.