Shares in Tailored Brands Inc., which owns a dozen men's clothing stores in the Indianapolis area, jumped 9 percent Thursday after the company announced plans to close hundreds of stores nationwide, part of a cost-cutting push for the owner of Men’s Wearhouse and Jos. A. Bank.
The Houston-based company plans to close about 250 locations this fiscal year, including all of its outlet stores, according to a written statement. Tailored Brands also is reducing expenses by about $50 million by slimming down its operations and overhead.
As part of the store-closing plan, the company will shut 80 to 90 standard Jos. A. Bank stores, as well as 58 outlet stores. Between 100 and 110 MW Tux stores also will be eliminated, part of a shift of tuxedo rentals to its full-line stores and partner Macy’s Inc.The company did not disclose the specific locations it would be closing.
Tailored Brands operates six Men's Wearhouse stores and six Jos. A Bank stores in the area.
Men's Wearhouse stores can be found locally at Clearwater Springs, Castleton Place, Avon Creek Shopps, Greenwood Shoppes, Clay Terrace and Hamilton Town Center. The retailer's website said the Clearwater Springs store is scheduled to close Saturday.
Jos. A. Bank stores are located locally downtown at 10 E. Washington St., at Fashion Mall Commons, Hamilton Town Center, Metropolis, Greenwood Park Mall and Clay Terrace.
The company also operates six local MW Tux stores located in its Men's Wearhouse locations. The nearest Jos. A Bank outlet location is in Edinburgh.
Investors applauded the move to reduce stores, which followed an unprofitable holiday quarter and a slide in sales. The stock rose as much as 16 percent, to $18.91. The shares—traded under the Men’s Wearhouse name until February—were up 11 percent this year through Wednesday’s close.
Tailored Brands, the largest retailer specializing in men’s suits, is scrambling to align its two major divisions. While sales have been growing at Men’s Wearhouse, Jos. A. Bank faces a customer exodus.
Last year, management abandoned Jos. A. Bank’s “ buy one suit, get three free”-style promotions, irking longtime shoppers. That sent the chain into freefall. Jos. A Bank’s same-store sales plunged 32 percent last quarter, compared with a 4.3 percent gain for Men’s Wearhouse.
Tailored Brands, which took that name when it adopted a holding-company structure earlier this year, said streamlining its stores will weigh on its profit forecast for the year.
The retailer is “tailoring down to a suitable size,” Cowen & Co. analyst John Kernan said in a report on Thursday. He boosted his earnings outlook for the company, which he expects to perform in line with the market.
Tailored Brands posted a loss of 30 cents a share, excluding some items, in the quarter ended Jan. 30. Still, that wasn’t as bad a result as analysts expected. They had projected a loss 37 cents on average, according to data compiled by Bloomberg. Sales fell to $825.7 million, missing the $838.6 million estimated by analysts.