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State of Md., Men’s Wearhouse had the best and worst of it
Turns out customers of Jos. A. Bank really liked the “buy one, get three free” company. They really did.
When Men’s Wearhouse finally wore down its rival and acquired Bank 18 months ago, one of the first things the victor decided to do was to end the famous Bank discounts. You know the ones that were blared over the airwaves by Bank’s overcaffeinated pitchman.
Well, Men’s Wearhouse can’t be too pleased with the results of that move. The company said this week that same-store sales at the Jos. A. Bank division dropped 35 percent in the first five weeks of the quarter. Shareholders weren’t pleased either, with predictable results for the company’s stock price.
To make matters even worse, George Zimmer, the founder of Men’s Wearhouse and its longtime pitchman, who was canned by the retailer after a power struggle in 2013, told Bloomberg Television that he had warned his fellow executives not to do the deal.
Men’s Wearhouse isn’t the first company to try to dramatically redefine its image in the marketplace. The question now is whether executives will beat a hasty retreat or hope their effort to remake Bank will bear fruit in the long run.
Also last week, Maryland residents who remember the boondoggle that was the launch of the Maryland Health Benefit Exchange got some good news. (And even if you don’t remember it you got some good news.) The Associated Press reported that a subsidiary of Blue Cross Blue Shield of North Dakota agreed to pay Maryland $45 million over the failed health care exchange.
Maryland contracted with Fargo-based Noridian Healthcare Solutions to create an online marketplace where residents could sign up for health insurance, but the system crashed as soon as it opened in 2013. Maryland ditched the software provided by the company, saying it was “defective and deficient,” and bought a replacement system developed in the state of Connecticut.
The settlement, approved this week by the North Dakota Department of Insurance, requires parent company Noridian Mutual Insurance Co. to immediately pay Maryland $20 million and $5 million annually over the next five years. Noridian Mutual Insurance does business as Blue Cross Blue Shield of North Dakota, which is North Dakota’s largest health insurer.
