Joseph Abboud is on the block.
Tailored Brands, which acquired the designer label in 2013 for $97.3 million, is said to be shopping it around to brand marketing firms as a way to get some quick cash to pay down debt. But the game plan will be to find a firm that will agree to license the label back to the company for use in its Men’s Wearhouse stores.
Tailored Brands is reportedly hoping to finalize a deal early next year.
Dinesh Lathi, chief executive officer of Tailored Brands, did not immediately comment on the report.
Tailored Brands is bringing the Abboud label in front of the usual suspects, with WHP Global, a new brand management company that just purchased Anne Klein, and Sequential Brands among those most interested, sources said. Marquee Brands, which owns Ben Sherman and Bruno Magli and is close to finalizing a deal for Destination Maternity, is also taking a close look, as is Bluestar Alliance, which owns Tahari and Bebe, they added.
The once-high-flying Tailored Brands has been struggling over the past several years as it attempts to navigate the more casual workplace and digest the acquisition of the Jos. A. Bank business, which it acquired for $1.8 billion in 2014. The company now carries a $2 billion debt load on its balance sheet.
Most of the executives who had been running the company at the time of the Bank acquisition have exited, including Doug Ewert, the ceo, who left at the end of 2018 and was succeeded by Lathi, who had been executive chairman of the board. Other longtime executives are also gone, including Scott Norris, the one-time president and chief merchant of the flagship Men’s Wearhouse division, and Mary Beth Blake, the president of Jos. A. Bank, who left last week.
Lathi has recruited Carrie Ask, a onetime Levi Strauss & Co. and Nike Inc. executive, who recently assembled a new management team from outside the company and last week was named chief customer officer.
However, business has yet to turn around. In reporting third-quarter results last week, Tailored Brands posted a net loss of $89.6 million compared to a profit of $13.9 million in the third quarter of last year. Net sales dropped to $729.5 million from $751.7 million in the third quarter of last year. Net earnings from continuing operations were $27.8 million, down from $34.8 million in the year-ago quarter.
The sale of the Abboud label could help the company’s fortunes if negotiated correctly, one source said. The plan includes the new owner retaining Joseph Abboud, the designer, to oversee the creative direction of the brand. “If it doesn’t end up in the right hands, it’s just a financing deal,” the source said.
The Joseph Abboud brand accounts for more than $500 million in sales for Tailored Brands. The company also operates an Abboud flagship on Madison Avenue in Manhattan, but the fate of that unit is unknown.