Tailored Brands to close Jos. A. Bank stores, appoints Dinesh Lathi to Board

By

Obi Anyanwu

Published
Mar 10, 2016

Tailored Brands, Inc. announced Thursday the consolidated financial results for the fourth quarter and full year of fiscal 2015 ended January 30, 2016. The company’s sales were affected by the acquisition and poor performance of Jos. A. Bank.

 
Fourth quarter comparable sales increased 4.3% at Men’s Wearhouse, 1.9% at K&G and decreased 2.7% for Moore’s. Comparable sales at Jos. A. Bank decreased significantly by 31.9%. Total net sales for the quarter decreased 11.1% to $825.7 million, retail segment net sales decreased 11.3% and corporate apparel sales decreased 7.5%.
 
Total net sales for the full year increased 7.5% to $3,496.3 million and retail segment net sales increased by 8.6%, but corporate apparel sales decreased by 5.3%.

Doug Ewert, Tailored Brands chief executive officer stated, "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. Our transition away from unsustainable promotions has proven significantly more difficult and expensive than we expected. Over the past several months we completed a comprehensive operational review of the Tailored Brands businesses and are in the process of taking actions we believe will right-size our store base, optimize our cost structure, return Jos. A. Bank to profitability and improve other operating aspects of Tailored Brands.”
 
Tailored Brands plans to close 250 stores during fiscal year 2016. The stores will fall into three categories: 80-90 full-line Jos. A. Bank stores, all Jos. A. Bank and Men’s Wearhouse outlet stores, which totals to 58 locations, and between 100 and 110 MW Tux stores. The company aims to salvage its acquisition of the Jos. A. Bank, which was made in 2014 for a total value of $1.8 billion.
 
The company also began a profit improvement program that will reduce the company expenses by approximately $50 million in 2016.
 
Ewert continued, "We estimate the cash costs to complete the store rationalization and profit improvement programs to be between $45 and $60 million for 2016. We are working hard to restore Jos. A. Bank's profitability and strengthen the rest of our portfolio of brands. 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."
 
In addition to the financial report, Tailored Brands also announced the appointment of Dinesh Lathi to its Board of Directors and the resignation of Jos. A. Bank Brand President Paul Fitzpatrick.
 
Dinesh Lathi is currently the CEO of One Kings Lane, a premium home décor and lifestyle destination. Prior to One Kings Lane, he served in various executive roles at eBay. Paul Fitzpatrick joined Jos. A. Bank in October 2014. He spent most of his career at Macy’s and held positions ESP Group and Magnin. Mary Beth Blake, the Chief Merchandising Officer of Men's Wearhouse, will replace Fitzpatrick.