HOUSTON — Tailored Brands Inc. (NYSE: TLRD), the recently formed parent company of the Men’s Wearhouse and Jos. A. Bank menswear brands, plans to close approximately 250 of its stores in fiscal year 2016, according to the company’s fourth-quarter earnings report released March 9.
The store closures will include 80 to 90 Jos. A. Bank stores, all 58 of its outlet locations and 100 to 110 of its MW Tux stores.
Houston-based Tailored Brands ended fiscal year 2015 on Jan. 31, 2016, with a $1 billion net loss. According to the earnings report, the generally accepted accounting principles (GAAP) operating loss includes a $1.15 billion “goodwill and intangible asset impairment charge,” which was related to Jos. A. Bank’s poor sales performance, as well as a store reorganization program that Tailored Brands initiated in the fourth quarter of fiscal 2015.
Jos. A. Bank’s comparable sales in the fourth quarter decreased 31.9 percent from fourth-quarter 2014 due to a decline in average transactions per store. Men’s Wearhouse’s fourth-quarter comparable sales increased 4.3 percent in that same time period.
“While our fourth-quarter and full-year results were consistent with our revised guidance, we remain very disappointed by the weak Jos. A. Bank results,” says Doug Ewert, CEO of Tailored Brands. “Our transition away from unsustainable promotions has proven significantly more difficult and expensive than we expected. 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 with or ahead of our expectations.”
Ewert estimates that it will cost the company between $45 million and $60 million to complete its store reorganization program, including the store closures.
“We are working hard to restore Jos. A. Bank’s profitability and strengthen the rest of our portfolio of brands,” says Ewert. “While our current initiatives are expansive, we are closely monitoring our progress and will make adjustments as necessary to create value for all our stakeholders.”
Tailored Brands Inc. is the largest specialty retailer of men’s suits and the largest provider of rental clothing in the U.S. and Canada. The company has more than 1,700 stores, including tuxedo shops within Macy’s. As of Jan. 31, Tailored Brands’ portfolio included 714 Men’s Wearhouse stores, 625 Jos. A. Bank stores, 160 MW Tux stores, 124 Moores stores and 89 K&G stores.
The company’s stock priced closed Wednesday, March 9 at $16.33 per share, up from $10 per share when it began trading on the New York Stock Exchange on Feb. 2, 2016.
— John Nelson