Big Discounts Work for Retailer Jos. A. Bank

Posted by: Ben Steverman on September 2, 2009

Jos. A. Bank Clothiers (JOSB) is the poster child for a retailing strategy that really seems to work these days: Sales, discounts and more sales.

Visit a Jos. A. Bank store these days and you will see signs trumpeting “1/2 Off” sales on the retailers’ suits and other menswear. Those signs are working.

The firm announced Sept. 2 that earnings per share last quarter rose 42% from a year before. Despite all the discounting, total sales rose 9.8% from a year ago (to $167.7 million) and same-store sales rose 6.2%. The chain is growing, planning to open 30 to 40 new stores next fiscal year.

The earnings blew away Wall Street estimates by 14 cents per share. Stifel Nicolaus (SF) analyst Richard Jaffe wrote Sept. 2:

[That] beat can be attributed to continued strong consumer response to the company’s aggressive, price-driven promotions as well as better than anticipated cost control and merchandise margin management.

These are tough times for most other specialty stores, especially those less willing to offer deep discounts. Consider that on Aug. 14 Abercrombie & Fitch (ANF) revealed that its same-store sales were off 30% last quarter.

In the past 12 months, shares of Abercrombie & Fitch are down 42%. In that time, Jos. A. Bank’s stock has risen 73%, including a 4.6% jump on Sept. 2.

In a conference call with analysts on Sept. 3, Jos. A. Bank execs will get a chance to explain the retailers’ success. And whether it can continue the tough task of offering big sales while boosting profits at the same time.

Reader Comments

D CHARLES WYNN

September 15, 2009 11:53 PM

I have been in the menswear retail biz for over 40 years, and honestly, I attribute much of our country's decline in business and financial woes to the way business "men" dress today. We forgot what it means to be professional and look professional. Meeting your prospect wearing athletic shoes, un-tucked and un-ironed sport shirt with a pair of un-pressed khakis... m-m-m, I see this everyday.... and I now work for Jos A Bank.

Yes indeed, all the sales DO bring customers through the doors and many DO buy, however, more and more guys, even those who work as lenders and financial planners believe, because they see someone else "Dress Down" that it's okay.

Looking back over the past 40 years at trends in mens apparel, business peaked when men were dressing the "part" and tanked when the ties came off and classic, smart looking business suits remained in mens closets, not on their backs.

Guys, if you want to be successful, take advantage of these great, deep discounts at Jos A Bank, let their wardrobe professionals help you get back to at least looking successful and watch what happens.... success DOES follow suit!

D CHARLES WYNN

September 15, 2009 11:56 PM

I have been in the menswear retail biz for over 40 years, and honestly, I attribute much of our country's decline in business and financial woes to the way business "men" dress today. We forgot what it means to be professional. Come on, meeting your prospect wearing athletic shoes, un-tucked and un-ironed sport shirt with a pair of un-pressed khakis...at a formal conference, m-m-m, I see this everyday.... and I now work for Jos A Bank.

Yes indeed, all the sales DO bring customers through the doors and many DO buy, however, more and more guys, even those who work as lenders and financial planners believe, because they see someone else "Dress Down" that it's okay.

Looking back over the past 40 years at trends in mens apparel, business peaked when men were dressing the "part" and tanked when the ties came off and classic, smart looking business suits remained in mens closets, not on their backs.

Guys, if you want to be successful, take advantage of these great, deep discounts at Jos A Bank, let their wardrobe professionals help you get back to at least looking successful and watch what happens.... success DOES follow suit!

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About

Bloomberg Businessweek’s Ben Steverman focuses on the latest moves in financial markets and emerging trends in stocks, bonds, and funds, always with an eye toward giving readers a better understanding of the sometimes confusing and often chaotic world of money. Standard & Poor’s senior index analyst Howard Silverblatt will also provide his take on companies’ finances and the markets. Voted one of the “Top 100 Finance Blogs” in 2007.

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