FINANCE

Men’s Wearhouse to acquire Jos. A. Bank for $1.8 billion

BY Marianne Wilson

New York — Ending a five-month saga, Men’s Wearhouse said it would acquire Jos. A. Bank Clothiers for about $1.8 billion, or $65 per share in cash. As part of the deal, Jos. A. Bank will terminate its plan to acquire Eddie Bauer from Golden Gate Capital.

The boards of both companies unanimously approved the transaction.

The offer is above the previous bid of $63.50 a share which Jos A. Bank had rejected in late February.

The deal will create the fourth largest men’s clothing retailer in the United States, with annual revenue of about $3.5 billion.

"We are pleased to have reached this agreement with Jos. A. Bank, which we believe will deliver substantial benefits to our respective shareholders, employees and customers," said Doug Ewert, president and CEO of Men’s Wearhouse. "Together, Men’s Wearhouse and Jos. A. Bank will have increased scale and breadth, and Jos. A. Bank’s strong brand and complementary business model will broaden our customer reach. We expect the transaction will be accretive to Men’s Wearhouse’s earnings in the first full year."

Ewert added that the combined company will have the operational flexibility to successfully execute on strategic plans at both brands and anticipates that the transaction will help drive significant shareholder value.

Men’s Wearhouse and Jos. A. Bank expect a smooth integration, as there will be no rebranding or remodels required — Jos. A. Bank’s store banner will remain in place.

In conjunction with this transaction, Jos. A. Bank has terminated its agreement to acquire Everest Holdings, the parent company of Eddie Bauer. Effective immediately, Jos. A. Bank is also withdrawing its previously announced tender offer to purchase for cash up to $300 million in value of its common stock.

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J.Shaughness says:
Mar-12-2014 11:15 am

MW/bank merger
Two competitors with markedly different business models will maintain their separate identities, thereby continuing to compete with eachother? Really? This will be fun to watch as both "evolve" in the future.

J.Shaughness says:
Mar-12-2014 11:15 am

Two competitors with markedly different business models will maintain their separate identities, thereby continuing to compete with eachother? Really? This will be fun to watch as both "evolve" in the future.

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Jelly Belly gears up for St. Patrick’s Day

BY CSA STAFF

Jelly Belly Candy Co. makes more than 100 different flavors of jelly beans, but in celebration of St. Patrick’s Day, it’s showing some special attention to its green Jelly Belly beans. There are 17 green varieties in all, each containing its own special flavor.

The company’s multitude of green treats include Watermelon, Green Apple, Sugar-Free Green Apple, Kiwi, Margarita, Sour Apple, Juicy Pear, Jewel Sour Apple, Booger (yes … booger), Mint Mint Chocolate Chocolate Chip, Mojito, Sunkist Lime, Lawn Clippings, Mango, Lemon Lime, Green Tea and 7up.

The company also is releasing a Green Draft Beer jelly bean, a festive variation of the previously released beer-flavored bean, just for St. Patrick’s Day. It’s available beginning March 14 exclusively (and in limited supply) at Jelly Belly Visitor and Tour Centers in California and Wisconsin.

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More bad news for American Eagle Outfitters

BY CSA STAFF

A little more than a month ago, Robert Hanson resigned as CEO of American Eagle Outfitters, following disappointing holiday sales, and caused shares to drop 10%. Shares dropped again, nearly 7% this time, following what the company called “highly disappointing” fourth-quarter results.

“While tough macro conditions have persisted in our retail sector, our merchandise and overall customer experience fell short of expectations,” said interim CEO Jay Schottenstein. “We’re taking steps to bring greater focus and excitement to our product offering and better engage our core customers. Our brands remain incredibly strong and I’m confident in our ability to execute the strategic plan and resume long-term profitable growth.”

Total net revenue for the quarter decreased 7% to $1 billion from $1.1 billion for the 14-week period last year. Consolidated comparable sales for the quarter decreased 7% over the same 13-week period last year. This follows a 4% comparable sales increase last year.

Gross profit fell 28% to $332 million and decreased 930 basis points to 31.9% as a rate to revenue. The decrease was primarily the result of increased promotional activity and the deleverage of rent on negative comparable sales.

Adjusted earnings per share fell to $0.27 compared to $0.55 last year, a 51% decrease.

The teen apparel retailer said that business conditions remain challenging, with severe winter weather contributing to weak demand. Based on a high single-digit decline in comparable sales, the company expects first quarter earnings per share to be flat compared to adjusted earnings per share of $0.18 last year. The guidance excludes potential asset impairment and restructuring charges.

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