Tailored Brands, that operates over 1,000 stores under Men’s Wearhouse, Jos. A. Bank, Moores and K&G Fashion Superstore brands, is restructuring its leadership team and opening more Men’s Wearhouse stores as it sees opportunities for growth in men’s fashion, the fastest growing segment in the U.S. clothing market.
Tailored Brands has gone through challenges after it filed for bankruptcy in 2020, which were further aggravated by the pandemic, but now sees it is on stable footing and ready to lean into a bright future.
“Tailored Brands has achieved a comprehensive strategic, operational and financial transformation.” The company said in a statement.
“The Board believes that with this deeply enhanced foundation, the Company is well-positioned to pursue future growth and profit improvement, making this an appropriate time for evolutionary change in the Company’s leadership structure,” it continued.
We’ve all heard such highfalutin corporate-speak before, but there’s reason to believe that Tailored Brands is telling it like it is.
The Moves
It just announced that Peter Sachse will be the sole occupant of the CEO seat. He’d shared co-CEO roles with Bob Hull since March 2021.
Hull will move over to serve as executive chairman of the board and Paul Soldatos will move into the position of lead director of the board. Sean Mahoney will continue as an active director of the privately-held firm.
The entire leadership team, including president John Tighe and executive vice president and chief stores officer Karla Gray, are relative newbies to the company, having joined after its painful bankruptcy and previous CEO Dinesh Lathi exited the company.
With a new leadership structure in place, Tailored Brands is poised for a prosperous future thanks to its deep talent pool.
The Bench
CEO Sachse served 34 years with Macy’s, exiting as chief growth officer. Executive board chair Hull worked for 17 years at Lowe’s Companies, the last 14 as CFO.
Lead board director Soldatos has deep merger and acquisition experience and held numerous board seats. EVP Gray hailed from Nike
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And Tighe was president of men’s tailored fashion manufacturer Peerless Clothing before joining Tailored Brands and he’d spent over a decade with J.C. Penney, exiting as chief merchant.
As president of Tailored Brands, Tighe oversees day-to-day operations of the flagship Men’s Wearhouse with 636 stores, plus the roughly 200 Jos. A. Bank chain and the hundred Moores’ locations in Canada.
Men’s Wearhouse and Moores are multi-brand retailers that also have a significant business in tuxedo rental. Jos. A. Bank is a private label menswear brand, acquired in 2014, and while it offers tuxedo rental too, that is a less important part of its business.
Playing To Fashion’s Fastest Growing Segment
All three brands serve men’s fashion needs with an emphasis on when he must dress up for a meeting, job interview, special date or a wedding with its tuxedo rental business. “We give a man confidence to get ready for the most important moments in their lives,” Tighe shared with me.
The brands play to the fastest growing segment in the fashion industry. While the average U.S. household spends 60% more on women and girls clothing ($735) than men and boys ($454), total expenditures on men and boys clothing rose 8.1% from 2021 to 2022, from $125.6 billion to $135.8 billion, compared with 7.5% for women and girls, up from $210.5 billion to $226.2 billion.
And through the third quarter 2023, men and boys growth continues to outpace that of women and girls, up 4.1% versus 3.5%, according to the Bureau of Economic Analysis.
Tailored Brands is determined to give men what they need when they have to dress up: expert help making the right decisions.
“Back in the day, men wore a uniform, a black, blue or charcoal gray suit with a white or blue shirt. But now, men don’t know how to dress since nobody wears a suit everyday to the office. They need help for all the different functions they have to prepare for,” he explained.
Value Proposition
The company’s brick-and-mortar stores are critical to the value proposition though Men’s Wearhouse recently launched a new website and branding under the tagline “Love The Way You Look.”
The website is fine to buy an occasional shirt or casual slacks, but when it really counts, men turn to the store where highly trained sales associates help him navigate the wide selection and get properly fitted. In addition, every store has a tailor on site to make necessary adjustments.
The tuxedo rental business is another critical component of its success. Young men typically start their customer journey with a prom rental and the good will engendered at that time brings him back for a wedding. And of course, the groom brings along his groomsmen to be outfitted.
Men’s Wearhouse recently gave the bridal party a digital tool, Wedding Wingman, to help in the planning process. It prompts the bridal couple to answer a few questions about the wedding, then presents some style-right choices that can be saved so when they arrive at the store, their selections are ready to try on. It also allows the groom to manage the wedding party, enabling him to track who’s picked up his tuxedo and to send reminders to the laggards, and there inevitably are some.
The tuxedo business, which Tighe describes as substantial, is a great way to make a good first impression on a young man and his buddies so they know where to go for other occasions when they need to dress like a grownup.
“We take care of them and become their store for the most important moments,” he shared and added, “But we don’t stop at just tailored clothing. We’re good at denim, sweaters, and casualwear. We’re not just there for their big days, we’re there for everyday.”
Men’s Wearhouse has also cultivated a loyal following among American veterans. Its “Threads of Valor” campaign for last Veteran’s Day resulted in $6.5 million donation to veteran’s causes.
While it donated a portion of sales proceeds to the program, some $5.5 million came directly from 1.3 million in-store customers who threw in an extra $1, $3 or $5 contribution at checkout. It also has partnerships with various veteran non-profits like Hire Heroes USA which helps former military members and their spouses succeed in the civilian workforce.
More Stores
Having fine tuned its in-store operations, Men’s Wearhouse is stepping it up by opening more stores. It ended the year opening four new stores, the most recent in Bala Cynwyd, PA, an upscale Philadelphia suburb on the Main Line. And two more are on tap to open early this year.
Being a private company, Tighe wouldn’t comment on revenues or earnings, but interestingly, the company has one posting on its website on the topic dated June 2022.
Tailored Brands reported 2022 fourth quarter revenue advanced 97% to $557.6 million and adjusted EBITDA “swung to positive $50.9 million from negative $123.1 million for the fourth quarter of 2020,” though it did not specify the fourth quarter period.
A back-of-the-envelope calculation would put the company’s annual revenues in the $2 billion range, which is not bad for a company that was on its last legs just a few years ago, especially if EBITDA stays in positive territory.
“Our business is stronger, more agile and financially healthier than it was prior to the pandemic,” the company said in a statement and there is every reason to believe it.
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