Dive Brief:
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Jos. A Bank reported Wednesday that Q3 same-store stores at Jos. A Bank fell 14.6% and same-store sales for the quarter-to-date were down 35.1%.
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Those drops are a reflection of the move to end Jos. A Bank's infamous deals, in particular the ability to get four suits for the price of one (and sometimes as many as seven for the price of one). Shares of parent Men’s Wearhouse fell 25% on the news Thursday.
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In an attempt to woo some customers back, Jos. A Bank has dipped its toe back in the promotional waters, offering a more modest “buy one get two free.”
Dive Insight:
Men’s Wearhouse CEO Douglas Ewert has been very vocal about the need for the company’s newly acquired Jos. A Bank brand to expand its customer base by broadening its cheap-suit reputation, telling CNBC in April:
"The Joseph Bank brand has a very loyal customer, and they respond to the quantity discounts. But the plan is to develop additional products to get a deeper penetration into their closet and give them another reason to shop with us besides just buy one get three free."
That has clearly been more easily said than done. Like Ron Johnson at J.C. Penney, Ewert’s attempt to end the big promotions and offer reasonable prices that match up with quality is getting a chilly response from customers.
In Johnson’s case, though, Penney never actually ever charged the prices listed on its tags. Customers wanted to feel like they’d received a discount, even if Johnson’s prices were the same as the sometimes fake “sale” prices.
In the case of Jos. A Bank, Ewert’s goal is to raise prices on better made clothing and a better mix of merchandise. The idea isn’t to go upscale, but to stop the constant churn of four suits at the price of one.
It’s a project that, unfortunately for Men’s Wearhouse, may be both necessary and impossible.
“As desirable as the change might be, shifting an entrenched business model is like trying to wean an addict off their choice of temptation: possible, but rarely without much pain and heartache,” Neil Saunders, CEO of retail research firm Conlumino, wrote in a note, according to Bloomberg.
