Dive Brief:
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In an effort to get a handle on steep losses, Tailored Brands, formerly known as Men’s Wearhouse and the new owner Jos. A. Bank, will close some 250 stores, including all outlet stores.
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Closings include 80 to 90 full-line Jos. A. Bank stores and its 49 outlets, plus nine Men’s Wearhouse outlet stores and 100 to 110 Men's Wearhouse Tux stores. Those stores are moving into Macy’s locations—12 are in Macy’s stores now and plans are to have 166 tuxedo stores in Macy’s this year, and another 122 in 2017.
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The moves come as Tailored Brands reports a Q4 loss of $1.06 billion, compared with a loss of $35.9 million year over year. Sales decreased to $825.7 million, mostly on Jos. A. Bank losses, with Men’s Wearhouse reporting a 5.3% sales increase.
Dive Insight:
It looks like time is running out fast for Jos. A. Bank to turn things around. After being bought by Men's Wearhouse in June last year, CEO Doug Ewert has been working on revamping Jos. A. Bank's brand and promotional strategy. Certainly, Jos. A. Bank outlet stores make little sense with its already low prices at full-line stores, so the company’s shuttering of those outlet stores is no surprise.
One of the main tactics Ewert has been working on is scaling back some of Jos. A. Bank's aggressive discounts, including its buy-a-suit-get-three-free promotion. But those moves have been met with stiff resistance by customers, something that seems to have caught the retailer by surprise.
Changing prices is clearly more easily said than done. Like Ron Johnson at J.C. Penney, Ewert’s attempt to end the big promotions and offer reasonable prices for quality goods is getting a chilly response from customers. Johnson's failing was rolling out the new pricing strategy before any testing, and before any promised renovations began in J.C. Penney stores.
In the case of Jos. A Bank, Ewert’s goal is to raise prices on better made clothing and a better mix of merchandise. The idea isn’t to go upscale, but to stop the constant churn of four-suits-at-the-price-of-one.
It’s a project that, unfortunately for Tailored Brands, may be both necessary and impossible.