Men's Wearhouse, which changed its name to Tailored Brands in January, acquired the Jos. A. Bank label for $1.8 billion in 2014. In a bid to bring the brand more upmarket, management last year put an end to the Buy One Get Three Free promotions that made the brand famous. Those same promotions had also made the brand a target of spoofs on "Saturday Night Live."
In one sketch on the NBC show, a mom says she buys the suits to clean up messes, because they're "effectively cheaper than paper towels."
Customers, however, have been unwilling to shell out more money on the label. As a result, the company's inventory levels were 9 percent higher at the end of the fourth quarter. Stifel Nicolaus analyst Richard Jaffe said that excess inventory is "cause for concern," and could result in increased markdowns.
On the plus side, Jaffe noted that clothing margins at the label improved during the quarter — a trend Ewert said should continue this year.
As part of its strategy to bring Jos. A. Bank back to profitability, Ewert said the brand will close 80 to 90 of its full-price stores this year. The company will also close all Jos. A. Bank and Men's Wearhouse outlet stores, which the CEO said were collectively not profitable. It will also close 100 to 110 tuxedo shops.
As of Jan. 30, there were 714 Men's Wearhouse stores, 625 Jos. A. Bank locations and 160 tux shops.
Tailored Brands stock, which is down more than 62 percent over the past year, closed more than 3 percent lower Wednesday.