Last May, when Timothy Finley announced his retirement as CEO of menswear cataloger/retailer Jos. A. Bank Clothiers, he said in a statement that the $187.2 million company “is in the best financial condition in its history and, as such, is positioned for an excellent future.”
The months following Finley’s departure were anything but excellent for the company, however. For the third quarter ended Oct. 30, Bank posted a net loss of $236,000 compared to net income of $2.2 million for the third quarter of ’98. Catalog sales dropped 1.6% on reduced circulation, while overall net sales fell 2%, to $43.7 million. The company placed some blame on September’s Hurricane Floyd for disrupting store sales.
As of late November, current CEO Robert Wildrick and other executives at Bank weren’t talking even to investment bankers, according to several who cover the Nasdaq-traded company. (Bank executives didn’t return repeated calls to Catalog Age either.)
“The company hasn’t been forthcoming lately – but the new people have nothing to be forthcoming about,” says Holly Guthrie, first vice president of Philadelphia-based investment banking firm Janney Montgomery Scott. Since Finley left, the company “has been rudderless. It has no strategy,” she adds.
But Bank’s strategy under Finley – adding casual apparel such as polo shirts and golfwear into the product mix – may have contributed to the problem. The increased emphasis on casual apparel in of itself wasn’t a bad idea, given the increasing casualness of U.S. workplaces. But Bank “hasn’t made the transition into casualwear well enough,” says a company observer who wishes to remain anonymous. “It hasn’t been able to do what Brooks Brothers and other competitors have done to make golfwear work.”
In fact, just nine days before announcing Finley’s departure, the company posted a mere 1% sales gain for its first quarter ended May 1, to $43.6 million, and net income for the quarter fell 47.5%, to $500,000.
But recent signs indicate that Bank is addressing the problem. Wildrick said in an interview with menswear trade paper Daily News Record that he wanted to place even greater emphasis on casualwear, especially on add-on items such as belts that would increase the average order size. And November 1999 sales were $18.9 million, up 9% from the previous November. Catalog sales were down 2.4% on a 1.3% cut in circulation.