GO
Loading...

Mom-and-Pop Retailers Lose to Men’s Wearhouse, DSW

Wednesday, 21 Mar 2012 | 7:26 PM ET
A Hard Bargain?
Cramer hunts for smart business ideas and says its important to think outside of the box.

Unable to compete with large men’s clothing stores who offer quality merchandise at low prices, Jim Cramer on Wednesday noted that more and more family-run retailers are going out of business. The New York Times first reported on the trend last month.

With the demise of these mom-and-pop retailers, both Men’s Wearhouse and DSW are taking share. Both stocks are within striking distance of their 52-week highs.

The Men’s Wearhouse controls more than one-third of the tuxedo market and accounts for 22 percent of all domestic men’s clothing store sales, Cramer said. It averaged 7 percent same-store sales in its core brand and has grown earnings-per-share by an average of 48 percent over the last two years. The company has 1,049 stores in the U.S. under the Men’s Wearhouse, Men’s Wearhouse & Tux, and K&G brands, as well as another 117 stores in Canada under the Moore’s brand.

Meanwhile, DSW continues to take share from its competitors around the U.S. It has 328 stores in 40 states and operates in 341 leased department stores across the country. The company recently reported strong quarterly results that included a 5.6 increase in same-store sales.

“We have to accept the fact that places like Men’s Wearhouse and DSW are where people go when they want luxury at value prices,” Cramer said. “We may lament the loss of the family business, but let's celebrate the gains that these two gems can make for you as they annihilate the competition.”

  Price   Change %Change
DSW
---
MW
---

Call Cramer: 1-800-743-CNBC

Questions for Cramer? madmoney@cnbc.com

Questions, comments, suggestions for the Mad Money website? madcap@cnbc.com

  Price   Change %Change
MW
---

Contact Mad Money

  • Showtimes

    Monday - Friday 6p ET
  • Jim Cramer is host of CNBC's "Mad Money" and co-anchor of the 9 a.m. ET hour of CNBC's "Squawk on the Street."

Mad Money Features

  • Grab the latest CNBC gear from the NBCUniversal Store!

  • Get a behind-the-scenes look at how Cramer formulates his investment advice. "Inside the Madness" is a column, which features e-mails and more with Cramer and his researcher Nicole Urken.

  • You’ve always wanted to hit the “Hallelujah!” button. Here’s your chance.