When casual Fridays put a wrinkle in the starched selling philosophy of Jos. A. Bank Clothiers, the company dressed down. Although it is still best known for making tailored clothing for the professional man, including suits, sport coats, dress shirts, and pants, it has added casual wear suitable for those dress-down Fridays and weekends. It also launched the David Leadbetter line of golf wear. The company sells its Jos. A. Bank clothes and a few shoe brands through its catalogs, website, and some 630 company-owned or franchised stores in 40-plus states and the District of Columbia. The business was acquired following a protracted battle by its larger rival The Men's Wearhouse (since renamed Tailored Brands) in June 2014.
Jos. A. Bank Clothiers was acquired by The Men's Wearhouse in June 2014 in an all-cash tender offer that paid $65 per share for Bank's outstanding shares. The $1.8-billion deal followed a lot of back and forth -- with each party trying to takeover the other -- triggered when Bank launched a takeover bid for its ultimate acquirer. Bank became a subsidiary of Men's Wearhouse and its shares were delisted. Combined, the two companies operate some 1,700 stores and generate some $3.5 billion in annual sales.
Jos. A. Bank Clothiers operates under the retail segment of parent company The Men's Wearhouse. In 2014 Jos. A. Bank generated net sales of $684 million, contributing about 21% to its parent company's total revenue.
The company operates through two segments: Stores and Direct Marketing. The Stores unit operates about 570 full-line stores, 40-plus factory stores, and 15 franchise locations. For corporate customers, it offers a credit card that provides users with discounts. Most of its stores house a tailoring shop.
The company boasts stores in 44 states and the District of Columbia. It also has distribution centers in Hampstead and Eldersburg, Maryland, and in Montreal in Canada.
Sales and Marketing
Jos. A. Bank stores are mostly located in fashion-oriented, specialty retail centers and malls.
Prior to its purchase by The Men's Wearhouse, Jos. A. Bank Clothiers logged more than a decade of healthy sales and profit growth spurred by a growing store base and online business. Indeed, fast-growing Jos. A. Bank has added more than 400 stores over the past 10 years, topping the 600-store mark in 2013.
Its new parent has few plans to make the company more profitable. For 2015, The Men's Wearhouse planned to add three to six more Jos. A. Bank stores for the year, after the subsidiary had opened 16 stores in 2014. Men's Wearhouse also created a three-year integration plan following its acquisition of the company, with plans to achieve $100 million in run-rate annual cost synergies by the end of fiscal 2016. This included savings on cost of goods sold, the elimination of duplication corporate expenses, and advertising purchase leverage.
Jos. A. Bank covers all the bases with its "Three Levels of Luxury" strategy, which includes the Jos. A. Bank Executive collection, the more luxurious Signature collection, and the exclusive Signature Gold collection. (The higher-end lines feature superfine qualities of wool and other materials.) The chain had also sought growth through nontraditional means. It began offering tuxedo rentals in about half of its stores in 2010 and now offers rentals at all of its locations. While Jos. A Bank already sells formalwear, it believes it can tap into an additional revenue stream by offering the rental option.
Apparently feeling pretty sure of itself, Bank launched a takeover bid for its larger rival The Men's Wearhouse in 2013, which ultimately resulted in its own acquisition by its former target. Along the way it agreed to the Eddie Bauer brand (owned by the private equity firm Golden Gate Capital) in a deal valued at $825 million, including cash and debt. However, it abandoned that deal when it succumbed to The Men's Wearhouse. The merger allowed both brands to better compete against department stores, such as Macy's, Kohl's, Nordstrom, as well as Brooks Brothers.