Men's Wearhouse finds full price doesn't suit Jos. A. Bank

When Men's Wearhouse acquired rival menswear retailer Jos. A. Bank in 2014, management vowed to wean shoppers off of the deep discounts the acquired retailer had grown famous for. BOGO (Buy One Get One) deals and even Buy One Get Three sales on suits had become the bread and butter of the Jos. A. Bank appeal, but the Wearhouse ownership saw the model as unsustainable. Now, according to reports, Men's Wearhouse's decision to nix Bank's deals has done significant damage to the retailer.

Men's Wearhouse announced that Jos. A. Bank had experienced a 14.6 percent drop in sales over the last quarter, despite sales being up 5.3 percent at Men's Wearhouse, according to USA Today. Men's Wearhouse did a valuation on Jos. A. Bank that led to a $90.1 million non-cash impairment charge, according to the article.

Furthermore, according to Business Insider, the quarter-to-date-same-store sales through the first week of December at Jos. A. Bank were down 35.1 percent.

In light of Jos. A. Bank's poor performance, CEO Doug Ewert issued a statement acknowledging that killing the Jos. A Bank deal model was to blame for the recent drop.

Source: josbank.com

"When we acquired Joseph Bank, we knew that we needed to correct the promotional model," Mr. Ewert said in the statement. "However, we underestimated the impact to the near-term performance as we began to execute the difficult, but necessary, corrective steps.'

The company's ousted founder and one-time advertising frontman, George Zimmer, chimed in on the situation in an interview with Business Insider.

Mr. Zimmer said that when board members proposed the acquisition of Jos. A. Bank during his tenure at Men's Wearhouse, he stood against it. He told them that the two brands were too similar, and it did not make sense to own both.

"I think they thought they could position Jos. A Bank differently than Men's Wearhouse, and apparently they are not able to," Mr. Zimmer said.

Men's Wearhouse plans to try to bring back shoppers who have moved away from Jos. A. Bank including the use of a loyalty program.

According to the Baltimore Business Journal, Men's Wearhouse has begun to bring back some of the Jos. A. Bank BOGO promotions after the announcement.

• Jos. A Bank continues to be a drag on Men's Wearhouse sales, shares plunge - USAToday
• Can Jos. A Bank wean its customers off BOGO sales? - RetailWire
• Men's Wearhouse, George Zimmer is waiting for your call - Business Insider
• As Jos. A. Bank sales tank, 'Buy one, get one' promotions return - Baltimore Business Journal