Tailored Brands Inc. is eying custom clothing as the next area for growth.
Doug Ewert, president and chief executive officer of the men’s wear firm, formerly known as The Men’s Wearhouse, told Wall Street analysts Thursday during a conference call on first-quarter results, “We view custom apparel as an important way to grow our business through personalization. By leveraging the Tailored Brands’ global supply chain, including the quick-turn capabilities of our domestic Tailored Clothing factory, we’re offering competing options that are differentiated in the marketplace with quality, value and speed.”
The company reported earnings results Wednesday after the equity markets closed. For the quarter ended April 30, net earnings were down 84.2 percent to $1.6 million, or 3 cents a diluted share, on a net sales decline of 6.4 percent to $828.8 million. On an adjusted basis, diluted earnings per share for the quarter ended was 29 cents. Wall Street was expecting 45 cents on sales of $842 million.
In the call, Ewert said the company last year introduced Joseph Abboud custom clothing in all Men’s Wearhouse and Moores Clothing for Men stores. Suit prices start at $795, a price point the ceo said is still “hundreds of dollars less than similar-quality suits in the marketplace.” Ewert said the company expanded its offerings to include Joseph Abboud custom non-iron dress shirts for $125 earlier this year. It more recently began a new collection of custom-tailored clothing under the JOE by Joseph Abboud brand, with suits having an opening price point at $395, Ewert said.
Ewert said the company was “encouraged” by the initial response from customers to the expanded custom offerings. “Last year total custom clothing sales were approximately $12 million. And we’re now tracking over $1 million per week. We expect this will continue to grow as we raise awareness, expand our offerings and introduce custom apparel at Jos. A. Bank later this year.” He added that revenue from custom clothing is booked upon garment delivery, which in turn creates a “lag effect on sales.”
Ewert also said that half of the Joseph Abboud custom business is from new customers, with the balance from those that were trading up.
For the quarter, Men’s Wearhouse posted a modestly below-plan comparable sales decline of 3.5 percent, while Jos. A. Bank comps fell 16 percent.
Ewert said the company is making progress on its transition plan, with continued execution on its realignment for the Jos. A. Bank business. While the trends, based on May comps, seem to be improving for its Men’s Wearhouse, Jos. A. Bank and Moores Clothing for Men businesses, Ewert cautioned that the volatility and significant sales declines seen since changing its promotional model will continue through the third quarter.