Tailored Brands alters growth plans with 250 store closings

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Tailored Brands alters growth plans with 250 store closings
March 10, 2016 | By Mike Troy

The company formerly known as Men’s Wearhouse plans to significantly reduce its physical presence this year by closing 250 stores, including more than 20% of the Jos. A. Bank stores acquired in 2014.

The major reduction is selling space by the company which changed its name to Tailored Brands earlier this year was announced in conjunction with the release of weak fourth quarter results that were in line with previously released results, which showed Jos. A. Bank stores had 32% decline in same-store sales.

“Our transition away from unsustainable promotions has proven significantly more difficult and expensive than we expected,” Tailored Brands CEO Doug Ewert. “We do, however, remain confident that Jos. A. Bank offers a longer-term opportunity to profitably grow market share in the menswear business. Additionally, our Men's Wearhouse, Moores, and K&G brands continue to perform well, with profitability in line or ahead of our expectations.”

To fix the situation, Ewert said the company would close between 80 and 90 Jos. A. Bank stores and all 49 of the brand’s outlet stores. At the end of the fourth quarter, Jos. A. Bank operated 625 locations. Also slated for closure at nine Men’s Wearhouse outlet stores, but none of the company’s 714 Men’s Wearhouse store. Between 100 and 110 stores branded as MW Tux are due to close.

“We have determined that outlet stores, which collectively were not profitable, are not sufficiently differentiated enough from our core offerings and have not resonated with our customers,” Ewert said.

The closing of store offering formalwear marks the continuation of a strategy to migrate tuxedo rentals to full line stores and a new store-within-a-store concept with Macy’s. Ewert said Tailored Brands has refined its Tuxedo Shop @ Macy's rollout schedule and now plan to open 166 stores in 2016 with another 122 locations due to open in 2017."

The closures and prompted the company to take a nearly $1.2 billion goodwill and intangible asset impairment change in the fourth quarter which resulted in a loss of $21.86 per share. On an adjusted basis to exclude the non-cash charge, the loss per share was 30 cents.

As previously reported in February, same-store sales at Men's Wearhouse increased 4.3% and K&G comps increased 1.9%.