Tailored Brands Inc. plans to shutter about 250 locations, including all its outlet stores, as the owner of Men’s Wearhouse and Jos. A. Bank copes with sluggish sales.
The Houston-based company will close 80 to 90 standard Jos. A. Bank stores, as well as all 49 of Bank’s outlet stores, according to a statement Wednesday. Between 100 and 110 MW Tux stores also will be shut, part of a shift of tuxedo rentals to its full-line stores and partner Macy’s Inc.
“As part of our store rationalization program we plan to close approximately 250 stores during fiscal year 2016,” said Tailored Brand’s CEO Doug Ewert. “The store closures fall into three categories. First, we expect to close 80 to 90 full-line Jos. A. Bank stores which we believe have limited potential for meaningful profit improvement. Second, we will close all Jos. A. Bank (49) and Men’s Wearhouse (9) outlet stores. 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.”
Tailored Brands, which took that name when it adopted a holding-company structure earlier this year, said the shake-up will weigh on its profit forecast for the year. It now expects earnings of $1.55 to $1.85 a share, excluding some items, down from as much as $2 a share previously.
The company, which bills itself as the largest retailer specializing in men’s suits, is scrambling to align its two major divisions. While sales have been growing at Men’s Wearhouse, Jos. A. Bank is trying to stem a customer exodus. Last year, management abandoned Jos. A. Bank’s “ buy one suit, get three free”-style promotions, irking longtime shoppers. That sent the chain’s sales into free fall.
Men’s Wearhouse bought Jos. A. Bank for $1.5 billion about two years ago. The Baltimore-based Bank had attempted to buy its rival, but a fierce bidding war ended with Men’s Wearhouse triumphant.
On Wednesday, Tailored Brand’s stock gained 6.3 percent to $17.39 in late trading after the latest results were released. Tailored Brands shares, which traded as Men’s Wearhouse until February, were up 11 percent this year through Wednesday’s close.