Dive Brief:
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Men's Wearhouse Thursday reported Q3 same-store sales at its Jos. A. Bank chain of stores declined 14.6%, which it said is “far below” its own forecast.
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A major part of Men's Wearhouse’s strategy for its Jos. A. Bank brand, which it acquired in June last year, has been to scale back some of Jos. A. Bank's aggressive discounts, including its buy-a-suit-get-three-free promotion.
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The response hasn’t been great, and the company says it will take time for shoppers to adjust and that, as a result, same-store sales will continue to decline 20% to 25% next quarter.
Dive Insight:
As Fortune notes, many observers will compare this consumer response to the major change in Jos. A. Bank’s discounting approach to that of J.C. Penney loyalists, who rebelled against then-CEO Ron Johnson’s attempt to normalize prices there rather than piling discounts onto prices that were never really ever charged.
Jos. A. Bank’s buy-a-suit-get-three-free promotions and the quality of its apparel were lampooned on comedy sketch show Saturday Night Live last year, and its new owners want to bring things to less aggressive levels. The company still makes its own suits, and if it can bring up the quality and style, that could be a differentiator. If, that is, it can shake the image of cheaper-than-paper-towels promoted by the comedy show skit and if it can withstand the initial revolt by shoppers trained to expect low prices and great volume deals.
Men's Wearhouse CEO Doug Ewert expressed faith in the changes at Jos. A. Banks, saying that younger men will eventually gravitate to the brand once they realize that updated styling and better merchandise options are of value.
“Despite these results, we continue to believe that transitioning away from the unsustainable promotional strategy we inherited from Jos. A. Bank and accelerating our new promotional strategy is the right thing to do,” Ewert said in a statement.
