Tailored Brands to Shutter Stores Due to Poor Sales

Tailored Brands, the parent company for Men’s Warehouse, Jos. A Bank and Joseph Abboud, the suit brand, will close hundreds of its locations and work to recreate a new model of itself as Jos. A. Bank sales plunged by over 31.5% in 2015.

However, an unseen benefit is being seen by Wall Street.

When hearing of the news about the store closing, shares of Tailored Brands were up by over 11% on Thursday. Industry insiders say that sales figures for January as well as February show that the bloodbath might be ending soon. It continues to have its problems, but it is not as bad during the first two months of 2016, said one research analyst.

That is due to besides the closing of approximately 250 stores, eliminating the buy one get three free deal was the correct thing to do, said analysts. They did not solve their problems in one quarter, but it appears as if they are moving in the right direction, said one Wall Street analyst on Friday morning.

Jos. A. Bank officials said last fall the steep discount offer of buying one and getting three free in truth was a promotional strategy that was unsustainable.

The promotion that was once highly successful was lampooned by Saturday Night Live in a stinging skit.

Consumers have considered the sale ludicrous, said analysts and they did not have an interest in adding four suits to their wardrobe when they needed just one or two.

Taking a quick glance, killing that deep discount appeared to make it worse. After it announced an end to the promotion, stock at Tailored Brands plummeted by 43%, and its sales continued plummeting as well.

Jos. A. Bank revenue plunged over 13% in last year’s third quarter alone.

During the just end fourth quarter, the slimmer margins caused slight net loss, due mainly because of the sales plunging at Jos. A. Bank stores.

The net loss during the quarter reached $1 billion in comparison to last year’s loss of $35.8 million for the same period. Overall, with all brands included, sales dropped 11.1%.

However, during the first two months of 2016, sales at stores opened a minimum of one year improved.

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