In rough economy, Jos. A. Bank thrives
After investment, expansion, men's retailer now poised for growth
Jason Bruns, left, of Baltimore asks the advice of Bob Morrison, right, about ties at the Jos. A. Bank store on Pratt Street. Morrison is the manager of the shirts and ties department at the store. (Baltimore Sun photo by Barbara Haddock Taylor / June 27, 2011)
While other men's clothing chains were shutting stores and cutting costs in the face of shrinking profits, the Hampstead-based retailer was expanding and investing.
Jos. A. Bank opened new stores — 110 nationwide since 2008, bringing the total to 527 — broadened its product line, started outlet and tuxedo-rental businesses and announced plans recently to take its e-commerce site international.
Most important, throughout the downturn the company, which specializes in career wear for men, offered promotions and sharp marketing — at one point even offering to take back suits from men who had been laid off.
Now, as the economy sputters back to life and many retailers work to rebuild, analysts say Jos. A. Bank is ahead of the game.
Sales of men's apparel in the United States have been shaky, falling from $53.2 billion in 2009 to $51.3 billion a year later, according to the New York-based market research firm NPD Group. Sales climbed to $53.4 billion in April of this year.
The menswear industry already was challenged by long-term trends toward casual office attire when the economy fell into recession.
NPD has found that men stop shopping for themselves when times are hard.
"They'll only buy when they're forced to replenish," said Marshal Cohen, NPD's chief retail analyst. "They'll wear their boxer shorts until the elastic wears out and their socks until there are holes in" them.
Some of Jos. A. Bank's rivals struggled during the downturn. With so few men buying suits, Men's Wearhouse pivoted to offering aggressive promotions — including buy-one-get-one-free deals — for the first time in 36 years.
Earnings for Men's Wearhouse, which also owns K&G, plummeted 50 percent in the first quarter of 2009. At the time, analysts said the company couldn't compete with Jos. A. Bank and its big bargains.
Men's Wearhouse has since begun to see a rebound, with earnings of $67.7 million last year on sales of $2.1 billion.
Even in the darkest years of the downturn, Jos. A. Bank made money, its annual profit increasing 22 percent to $71.2 million in 2009, according to regulatory filings. Last year, sales increased another 21 percent to $85.8 million.
Analysts attribute much of the company's success to its deep discounts. Sales are offered so frequently — often, several times a week — that some shoppers joke they're not sure when there isn't some sort of promotion or sale going on.
"They're doing better because they have the most aggressive pricing that I've ever seen," said George Whalin, a California-based retail consultant. "They have these deals that run week after week after week."
"The sales are kind of ridiculous," said Kevin Horney, 24, as he picked up suits from the Jos A. Bank store in downtown Baltimore. "But in a good way."
Jos. A. Bank CEO R. Neal Black said bargains were the only way to attract cash-strapped shoppers during the recession.
"We offered pretty compelling values at a time when consumers needed it," Black said. "The consumer will let you know what he is willing to pay."
Jos. A. Bank's products fall into a category that Cohen calls "renaissance brands," or classic clothes of good quality. Polo Ralph Lauren, Guess and North Face are also in that category, he said.