PAUL FITZPATRICK LEAVES TAILORED BRANDS; COMPANY TO CLOSE OVER 200 STORES IN 2016
California-based Tailored Brands, Inc., which owns Jos. A Bank, Men’s Wearhouse, Moore’s, K&G, and Joseph Abboud among other companies, has announced that Paul Fitzpatrick, a former Macy’s executive who headed Jos. A Bank for just over a year, has left the company. He will be replaced by Mary Beth Blake, the corporation’s chief merchandising officer.
The move was announced shortly after the company reported its consolidated financial results for the fiscal fourth quarter and full year ended January 30, 2016. For the fourth quarter, the company reported a loss of $1.1 billion, and an adjusted loss per share of $0.30 and GAAP loss per share of $21.86. For the fiscal year 2015, the company reported adjusted EPS of $1.80 and GAAP loss per share of $21.26 primarily due to non-cash impairment charges.
The largest issue for the company was the poor performance of Jos. A. Bank, where comparable sales decreased 31.9%. (Both Men’s Wearhouse and K&G saw increases in comparable sales.) “While our fourth quarter and full year results were consistent with our revised guidance, we remain very disappointed by the weak Jos. A. Bank results,” said CEO Doug Ewert. “Our transition away from unsustainable promotions has proven significantly more difficult and expensive than we expected. We do, however, remain confident that Jos. A. Bank offers a longer-term opportunity to profitably grow market share in the menswear business. Over the past several months we completed a comprehensive operational review of the Tailored Brands businesses and are in the process of taking actions we believe will right-size our store base, optimize our cost structure, return Jos. A. Bank to profitability and improve other operating aspects of Tailored Brands.”
Ewert also announced the company is expected to close 80 to 90 full-line Jos. A. Bank stores which have shown limited potential for meaningful profit improvement, along with all 49 Jos. A. Bank and nine Men’s Wearhouse outlet stores and between 100 and 110 MW Tux stores. “We have determined that outlet
stores, which collectively were not profitable, are not sufficiently differentiated enough from our core offerings and have not resonated with our customers. As for MW Tux, these closings are a continuation of our strategy of migrating tuxedo rentals to full line stores and reflective of our new partnership with Macy’s, Tuxedo Shop @ Macy’s. We have refined our Tuxedo Shop @ Macy’s rollout schedule and now plan to open 166 stores in 2016 with the balance of 122 stores to be opened in 2017,” added Ewert.
“We have also embarked on an extensive profit improvement program that we believe will reduce our expenses by approximately $50 million in 2016. This program includes reduced distribution costs, cost reductions in our organizational structure, payroll and employee benefit reductions and savings in occupancy and goods-not-for-resale Reflective of the many operational changes being made and the expectation for a slow recovery at Jos. A. Bank, we believe that fiscal year 2016 adjusted EPS will be in the range of $1.55 to $1.85. This includes comparable sales of negative mid-teens and significant product margin improvement for Jos. A. Bank. We are working hard to restore Jos. A. Bank’s profitability and strengthen the rest of our portfolio of brands.”