Unlucky 13? One of Men's Wearhouse's challenges
Summer 2013 didn't seem to suit Men's Wearhouse.
First, the men's clothing company announced founder George Zimmer had been terminated from his position as executive chairman. Then Men's Wearhouse released disappointing quarterly results and lowered its earning forecast. Now CEO and President Doug Ewert says some superstitious brides- and grooms-to-be are avoiding 2013 weddings, a blow to the company's tuxedo business.
While the retailer's outlook remains cautious, Ewert told CNBC in an exclusive interview that he is focusing on the company's strengths going into the holiday season and beyond. His message may be starting to resonate with Wall Street. Goldman Sachs on Wednesday initiated coverage of the company's stock with a "buy" rating.
George Zimmer's shadow
In two separate press releases issued days apart in June, Men's Wearhouse announced and explained why the board terminated founder George Zimmer from his position as executive chairman.
(Read more: Men's Wearhouse fires founder; he fires back)
Ewert hasn't spoken publicly about it. When asked if termination was the only option in the wake of the disagreements, Ewert said, "The board tried very hard to find another resolution and was really left in this position."
Zimmer remains the company's largest shareholder with a 3 percent stake, but the board has had no contact with him since the termination, Ewert said.
"It was an unfortunate situation, but we haven't seen any evidence in our business of a falloff related to the fact that George is no longer our spokesman on TV," he said.
But Men's Wearhouse shares have suffered, falling more than 12.5 percent since the company parted ways with Zimmer in June. Shares took a big hit, a 12 percent drop, in one session after posting quarterly earnings on Sept. 11.
In a research note, Goldman analyst Taposh Bari said the pullback in Men's Wearhouse stock creates "an attractive entry point" for new investors.
Ewert reiterated the company's cautious outlook, citing macroeconomic headwinds and noting "our average transaction values and the units per transaction are very strong still but we are seeing a slowdown in traffic in some of our stores."
It's not cold feet, it's triskaidekaphobia
There's also the matter of unlucky number 13—Ewert said it's an issue for Men's Wearhouse's tuxedo rentals.
"Every time there's a numeric anomaly on the calendar, we see that shift the wedding business," Ewert said.
"Whenever the 13th day of the month falls on a Saturday, weddings fall off. When the calendar said 9/10/11, it was one of the biggest wedding days. When the calendar said 7/7/07, it was one of the biggest days we ever experienced. So we have been dealing with these numeric anomalies impacting when couples choose to have their weddings for 14 years now and we're seeing evidence that people are delaying getting married in 2013," he said.
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In its latest earnings release, Men's Wearhouse said revenue from tuxedo rental services fell 4.2 percent, more than the 2.3 percent drop in overall revenue. Men's Wearhouse is the country's largest tuxedo rental operator, according to Ewert.
Luckily, 2014 is just around the corner and on Tuesday, the retailer announced a five-year extension in its exclusive co-marketing agreement with David's Bridal.
The tuxedo rental business is a valuable gateway for Men's Wearhouse to capture new consumers.
"We rent over 3 million tuxedos in a year, the average age of a tuxedo renter is 27 years old, so we have this great magnet to attract millennial-aged customers into our stores. Now with slim-fit products, denim and designer denim, we have great products that we can convert these rental customers into retail customers," he said.
New NPD Group data showed total apparel sales for men are up 6 percent from January to July this year compared with the same period in 2012. The report cited double-digit growth in tailored categories, which is potentially good news for Men's Wearhouse's slim-fit suits and separates. Ewert said those items are some of its best-selling products for younger male consumers.
(Read more: Real men don't shop? Not so: Retail's new frontier)
In a blog post, NPD chief industry analyst Marshal Cohen said, "There has been a slow and steady return to dressing up over the last couple of years, in and out of the workplace."
Ewert agreed, noting millennials in particular. "The baby boomers that we built our business on have always seen the suit as a kind of a uniform, as a Monday through Friday type of item. The millennials see tailored clothing completely different. They see it as more versatile piece of their wardrobe," he said.
The next leg
Men's Wearhouse recently acquired menswear brand Joseph Abboud along with a U.S. factory that produces its merchandise, which Ewert explained is just the start of what the retailer is doing to expand the business and unlock value for shareholders.
While Ewert wouldn't elaborate much on the plan for the K&G business, he did say the company has received some offers and is reviewing them. Plus, Ewert sees the footprint of Men's Wearhouse expanding including both full-line locations and outlets, which are currently being tested. Ewert also sees opportunities to grow margins through more exclusive brands.
"There's a lot of talk right now about the macro conditions, and the impact it's having on apparel retail, but I would point to the fact that we think we are doing better than most of our competitors," he said. "We have strong brands, we have No. 1 market share positions and we are confident that we are going to work through these headwinds."
—By CNBC's Courtney Reagan. Follow her on Twitter @CourtReagan.