Dive Brief:
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Macy’s and Tailored Brands, owner of Men’s Wearhouse and Jos. A. Bank stores, on Wednesday announced that their tie-up — known as The Tuxedo Shops at Macy’s — is off, according to a press release.
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The companies first partnered in June 2015, but Tailored Brands halted an expansion of the effort in March after it tallied operating losses of between $19 million and $20 million — well beyond the $10 million in startup losses the company had expected.
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The Tuxedo Shops at Macy’s will continue taking reservations until June 1, winding down by July 14. Customers with outstanding rentals can transfer them to a nearby Men’s Wearhouse or Jos. A. Bank store.
Dive Insight:
Tailored Brands executives had already expressed plenty of frustration with their Macy’s partnership, and by March things didn't look good. The woes add to the struggles the company has seen since the ouster of founder George Zimmer, the face of the company since its launch in 1973 (best known for his trademark promise “You’re going to like the way you look. I guarantee it").
Tailored Brands recorded a non-cash impairment charge of $14 million in the fourth quarter related to its fixed assets in Macy stores and in March eased the ramp-up of those tuxedo concessions from 170 to 300, according to a Seeking Alpha transcript of executives' call with analysts. That news came with a report of a 2.2% decline in its overall Men’s Wearhouse business, after a 4.3% rise in the year-ago period, though Jos. A. Bank same-store sales rose 3.6% after falling 32.3% last year.
“Unfortunately, the initiative did not generate the revenue that both companies had envisioned," Tailored Brands CEO Doug Ewert said in a statement. "We believe it is in the best interest of our company and our shareholders to wind down the partnership.”
Meanwhile, Nordstrom has seen fit to partner with a tuxedo rental startup The Black Tux, inking a deal for six showrooms beginning with Nordstrom's store in Mission Viejo, CA, and expanding later this year to locations in Atlanta, Boston, Denver, Orange County, CA, Seattle and Washington, DC.
Until now, e-commerce player The Black Tux has almost exclusively offered style choices online (including online personal shopping assistance), selling lower-priced tuxedos that it designs and makes. The Nordstrom partnership offers more opportunities to try on and work with a stylist in person. The Black Tux also runs or is planning to open showrooms in Chicago, Dallas, Los Angeles and San Francisco.
