Tailored Brands alters growth plans with 250 store closings
The company formerly known as Men’s Wearhouse plans to significantly reduce its physical presence this year by closing 250 stores, including more than 20% of the Jos. A. Bank stores acquired in 2014.
The major reduction is selling space by the company which changed its name to Tailored Brands earlier this year was announced in conjunction with the release of weak fourth quarter results that were in line with previously released results, which showed Jos. A. Bank stores had 32% decline in same-store sales.
“Our transition away from unsustainable promotions has proven significantly more difficult and expensive than we expected,” Tailored Brands CEO Doug Ewert. “We do, however, remain confident that Jos. A. Bank offers a longer-term opportunity to profitably grow market share in the menswear business. Additionally, our Men's Wearhouse, Moores, and K&G brands continue to perform well, with profitability in line or ahead of our expectations.”
To fix the situation, Ewert said the company would close between 80 and 90 Jos. A. Bank stores and all 49 of the brand’s outlet stores. At the end of the fourth quarter, Jos. A. Bank operated 625 locations. Also slated for closure at nine Men’s Wearhouse outlet stores, but none of the company’s 714 Men’s Wearhouse store. Between 100 and 110 stores branded as MW Tux are due to close.
“We have determined that outlet stores, which collectively were not profitable, are not sufficiently differentiated enough from our core offerings and have not resonated with our customers,” Ewert said.
The closing of store offering formalwear marks the continuation of a strategy to migrate tuxedo rentals to full line stores and a new store-within-a-store concept with Macy’s. Ewert said Tailored Brands has refined its Tuxedo Shop @ Macy's rollout schedule and now plan to open 166 stores in 2016 with another 122 locations due to open in 2017."
The closures and prompted the company to take a nearly $1.2 billion goodwill and intangible asset impairment change in the fourth quarter which resulted in a loss of $21.86 per share. On an adjusted basis to exclude the non-cash charge, the loss per share was 30 cents.
As previously reported in February, same-store sales at Men's Wearhouse increased 4.3% and K&G comps increased 1.9%.
Specialty retailer mobilizes social efforts
Bag, Borrow or Steal, a specialty online retailer that allows consumers to buy, rent and sell luxury handbags and accessories, is all about creating a sense of community.
To further enhance the feeling of connectedness among customers, Bag, Borrow or Steal is partnering with mobile marketing solutions provider Zumobi to curate and optimize its social content for mobile shoppers. Using the Zumobi Zbi brand integration platform, Bag Borrow or Steal aggregates content from its blog, Twitter and Instagram feeds into a dynamic shopping experience called a microzine that is optimized for the mobile Web.
A key component of the microzine is the ability to introduce shoppable content, allowing the retailer to offer direct links to purchasable items in the social content delivered to customer mobile devices. The retailer is also partnering with Seattle-based digital marketing agency Hi Pop Media to produce the microzine.
Bag, Borrow or Steal is also able to collect and analyze customer data for refined targeting, as well as measure overall mobile content performance. Customers receive personalized mobile content based on their behavior and shopping history.
“Our job as a retailer now requires the ability to not only stay ahead of fashion trends, but digital trends as well, as more consumers take their shopping habits to their smartphone,” said Robert Treves, COO of Bag Borrow or Steal. “This year, we’re focused on jumpstarting our mobile efforts and engaging smartphone users – a new audience for our company. Zumobi’s Microzine enables us to accomplish this by providing an elegant app-like experience for our customers, without developing a separate app.”
Party City parties on in fourth quarter; plans to expand
Party City on Thursday posted an increase in same-store sales and profit for the fourth quarter and said it is on track to expand its footprint this year.
But it also cautioned that sales may slow.
Party City reported a profit of $86.5 million for the fourth quarter ended Dec. 31, up from $79 million a year earlier. On a per-share basis, earnings declined to 72 cents from 83 cents.
Total revenue slipped 2.8% to $781.5 million. Same-store sales increased 2.8%, fueled by a strong Halloween season.
“We are very pleased to have ended 2015 with a strong fourth quarter and to have delivered total sales and earnings performance for the year within the original guidance ranges we set for ourselves early in 2015," said James M. Harrison, CEO, Party City Holdco Inc.
The company noted that in 2015 it completed the acquisitions of costume maker Travis Designs and plastics manufacturer ACIM.
Looking ahead to fiscal 2016, Party City expects fiscal 2016 total revenues of $2.35 to $2.42 billion, and comparable sales to range from flat to up slightly. Its revenue guidance fell short of analysts' expectations.
“In 2016, we have many exciting opportunities to expand our business such as tapping into new customer markets like B2B, increasing our international penetration, expanding our store base and driving e-commerce growth, Harrison said. “We remain focused on our multiple growth strategies and are committed to successfully integrating the acquisitions of ACIM and Travis, as well as continuing to seek new opportunities to deepen our vertical model to fuel further margin expansion by manufacturing more of what we sell.”
Party City Holdco’s retail operations include approximately 900 party supply stores (including some 180 franchised locations) throughout North America operating under the names Party City and Halloween City, and e-commerce websites, principally through the domain name PartyCity.com.