Jos. A. Bank Clothiers is getting into the tuxedo rental business. The menswear cataloger/retailer plans to launch the new initiative this month on a test basis in about 5% of its 474 stores. Bank aims to rollout the initiative to more than half of its stores in the spring.
Customers had been asking the merchant for a tux rental service, according to a statement from R. Neal Black, president/CEO of Jos. A. Bank. “Although we are a national leader in the sales of tuxedos, we have not offered the specific formalwear products and services that are most commonly used by wedding parties and these products complete our formal assortment,” Black said.
Hampstead, MD-based Bank has partnered with a national distributor who will own the formalwear inventory and deliver the orders to its stores. This will reduce the required investment and risk associated with starting up a new operation, said the merchant’s chief financial officer David E. Ullman.
“With this structure, we expect that the incremental sales volume will add to the operating margins of the Stores segment, although the gross profit rate will be lower than we achieve with our merchandise sales,” Ullman said. “Also, the tuxedo rental business has the potential to generate significantly higher gross margins if we choose to invest in our own infrastructure in the future.”