Tailored Brands Inc. has officially exited the corporate apparel business.
The Fremont, Calif.-based parent company of Men’s Wearhouse and Jos. A. Bank said early Monday that it has sold the division for $62 million in cash to a group led by its existing U.K.-based management team. Of the sale price, approximately $56 million was received upon closing and approximately $6 million is being deferred to the first quarter of fiscal 2020. The company said it will use the money to pay down debt, freeing up cash for capital expenditures.
“We are pleased to have reached an agreement to sell our corporate apparel business. The consummation of this transaction supports our previously stated strategy to focus on our core retail business in the U.S. and Canada while reducing debt,” said Tailored Brands president and chief executive officer Dinesh Lathi.
At the same time, the company updated its outlook for the second fiscal quarter. It now expects net sales in the range of $787 million to $789 million, GAAP diluted earnings per share in the range of 64 cents to 66 cents and adjusted diluted EPS in the range of 78 cents to 80 cents, which is above the projections made on June 12 of adjusted EPS of 65 cents to 70 cents.
“We are pleased to provide updated guidance for second-quarter adjusted EPS that is above our previous outlook,” Lathi said. “We remain focused on improving our performance by transforming our customer experience through three key strategic initiatives: delivering personalized products and services; inspiring and seamless experiences in and across every channel, and brands that stand for more than just price. We look forward to sharing more about our progress on these initiatives on our upcoming conference call in September.”
Tailored Brands will report its second-quarter results on Sept. 11.