Jos. A Bank has been the laughing stock of retail for some time.
It was known for its buy-one-get-many-free sales — a tactic that resulted in a Saturday Night Live skit.
It has reported multiple quarters of plummeting sales. In the most recent quarter, comparable sales for Jos. A Bank dipped 16.%.
But now, Eric Beder of Wunderlich Securities is writing that Jos. A Bank, and its parent company, Tailored Brands, may be about to pull off a turnaround.
“After a long, painful, and arduous period since acquiring Jos. A. Bank in June 2014, which materially shattered investor confidence in [Tailored Brands], we believe the chain is reaching an inflection point that will drive top- and bottom-line upside for the company and restore the lustre,” Beder writes.
Jos. A Bank has been blamed for much of Tailored Brand’s troubles.
In fact, Men’s Wearhouse founder George Zimmer told Business Insider’s Hayley Peterson in December that it was a mistake.
“It was a mistake to acquire Jos. A Bank,” Zimmer told Peterson. “I think everyone realises that, including Men’s Wearhouse at this point in time.”
Up until now, the compay’s efforts to reshape itself haven’t fared too well. When the company tapered down those excessive sales (“ruinous sales,” as Beder writes), the company saw sales drop.
The company appeared to believe that nixing these sales for improved, upgraded apparel was the right thing to do.
“It’s this focus on newness that will give us the best shot at winning a larger share of closet with existing customers and expanding our reach to new and younger customers,” Tailored Brands CEO and President Doug Ewert said an earnings call last year.
“Bottom line: We need to give customers new reasons to shop at Jos. A. Bank and [give] our stores more ammunition to grow their business,” he added at the time.
But it’s not so easy to wean customers off sales — look no further than Gap Inc. as an example, which has struggled to give consumers a compelling reason to pay full price.
Excessive discounting is a dangerous trend that runs rampant in the retail industry, leading to a cycle that’s difficult to break.
“What we did not know then but do now was just how toxic some of the promotions were and how deep and far-reaching the transformation required would be,” Ewert said in a conference call with analysts in December.
Beder notes that these misfires have shrouded the positive efforts the brand has made — like the aforementioned improves apparel and an “increased increased focus on custom clothing, material cost-cutting gains, the expansion of the Joseph Abboud and owned branded lines, and increasing penetration of the tuxedo and rental business.”