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It seems that reports of the suits demise were premature. A recession and general, back-to-basics mood post-September 11th has put the starch back in a lot of shirts and the gray flannels back in a lot of offices. Its not surprising then that a 97-year-old clothier is profiting from the traditional trend. Robert N. Wildrick, CEO of Jos. A. Bank Clothiers, recently discussed suit sales, store expansion and the firms doubling stock.
Despite a tough economy, you recently reported sales gains of 23.8 percent in your stores and about 40 percent for your online and catalog business for the month of March. What is driving those gains?
Two things have happened. One, we have maintained the traditional customer that we always have had, but now, in addition to that, we have suddenly become very popular with the younger executives as well. Number two, our surveys continue to tell us that the price/value relationship for our goods is very high. We are putting an awful lot of quality into the product for the money, and people realize that.
There has been talk since September 11th of a return to basics and tradition. Have you seen that reflected in your business?
We are seeing the suit part of our business, which is 29 percent of our business, firm up. It had deteriorated, but it has firmed up since September 11th. The real strength of our company is that were a complete menswear store offering everything from formal wear to underwear. So thats whats helped us. Rather than being just one thing we have everything a man would need.
Who is a typical Jos. Bank customer?
A typical customer would be a man 28 years old or older. He tends to be a little bit more affluent because he tends to be in an executive or a junior executive position. Hes a family man/businessman-type individual.
Your stock has also shot up. It has more than doubled so far this year.
We expect it to continue to grow.
How much? It cant continue to double, I wouldnt think.
I dont see why not. Our price/earnings ratio has not been what we consider the industry average to be, which is between 20 and 30 times earnings. Whats happening is that as people are recognizing our companys results, we are getting the price/earnings ratio consistent with where most specialty stores are. We were below that before.
How much more catching up do you have to do?
Well, we made $1.05 per share and the stock closed today at $17.70 so whatever that comes out to, about 17 times earnings. I think that the price/earnings ratio for retail stocks of our type is in the mid-20s, so the stock has a chance to grow significantly against the price/earnings ratio. If we continue to perform at an accelerated rate there should be even more growth potential there.
From a sales perspective, do you expect to be able to continue those double-digit increases?
You never know in the retail business. We are planning sales increases this year, but how much? I really cant say right now. Well see. Theres too much going on. Gasoline prices are going up. Theres trouble in the Middle East. All of these things affect us just like they affect the market. But well continue to outperform everybody else just like we did last year. Well be among the leaders.
One of the things you are doing is adding more stores. You are up to 137 now?
It might be 138 today. We are adding 23 more this year.
Last year you said you planned to add 75 to 100 stores by the end of 2003. Are you still on track for that?
Oh yeah. We are thinking about accelerating it, we are doing so well. We have more locations identified than we are willing to open at this time. We run the business, from a financial standpoint, in a very conservative manner. We dont want to overexpand. But as we generate more profits and sales continue to come in the way they have been coming in, we may accelerate our growth program pretty dramatically.
Are most of your stores in the mid-Atlantic area?
Most of our stores are between Florida and Massachusetts, from north to south, and then as far west as Utah. The bulk of the stores would be from St. Louis east.
Are you looking to expand west?
We are looking to continue to expand in the area where we already have businesses, and we think we can put as many as 200 more stores in those states. Along with that we are starting to research our expansion capability on the West Coast. Were sure we can get at least another 100 stores out in that area.
How much of the business is on the Web now?
We dont break that down individually, but almost 15 percent of our total business is done between the catalog and the Web. The customer migrates back and forth between the Web, the catalog and our stores. Were really a multi-channel retailer. If its a rainy day, they might shop on the Web. Sometimes they just peruse the catalog. We plan to continue to grow the Web site and continue to stay ahead of the technology.
Among the most traditional of suits is the seersucker. It got pretty hot here recently. Have those been selling?
We are selling a lot of seersucker suits. [They] are one of the things were known for. We do very well with those. We see that whole lighter-weight seersucker/poplin suit coming back.
You came out of semi-retirement 2 1/2 years ago to run Jos. Bank. What are your future plans?
I just signed a new three-year contract with the company, so for the next three years Im not going anyplace.
Despite a tough economy, you recently reported sales gains of 23.8 percent in your stores and about 40 percent for your online and catalog business for the month of March. What is driving those gains?
Two things have happened. One, we have maintained the traditional customer that we always have had, but now, in addition to that, we have suddenly become very popular with the younger executives as well. Number two, our surveys continue to tell us that the price/value relationship for our goods is very high. We are putting an awful lot of quality into the product for the money, and people realize that.
There has been talk since September 11th of a return to basics and tradition. Have you seen that reflected in your business?
We are seeing the suit part of our business, which is 29 percent of our business, firm up. It had deteriorated, but it has firmed up since September 11th. The real strength of our company is that were a complete menswear store offering everything from formal wear to underwear. So thats whats helped us. Rather than being just one thing we have everything a man would need.
Who is a typical Jos. Bank customer?
A typical customer would be a man 28 years old or older. He tends to be a little bit more affluent because he tends to be in an executive or a junior executive position. Hes a family man/businessman-type individual.
Your stock has also shot up. It has more than doubled so far this year.
We expect it to continue to grow.
How much? It cant continue to double, I wouldnt think.
I dont see why not. Our price/earnings ratio has not been what we consider the industry average to be, which is between 20 and 30 times earnings. Whats happening is that as people are recognizing our companys results, we are getting the price/earnings ratio consistent with where most specialty stores are. We were below that before.
How much more catching up do you have to do?
Well, we made $1.05 per share and the stock closed today at $17.70 so whatever that comes out to, about 17 times earnings. I think that the price/earnings ratio for retail stocks of our type is in the mid-20s, so the stock has a chance to grow significantly against the price/earnings ratio. If we continue to perform at an accelerated rate there should be even more growth potential there.
From a sales perspective, do you expect to be able to continue those double-digit increases?
You never know in the retail business. We are planning sales increases this year, but how much? I really cant say right now. Well see. Theres too much going on. Gasoline prices are going up. Theres trouble in the Middle East. All of these things affect us just like they affect the market. But well continue to outperform everybody else just like we did last year. Well be among the leaders.
One of the things you are doing is adding more stores. You are up to 137 now?
It might be 138 today. We are adding 23 more this year.
Last year you said you planned to add 75 to 100 stores by the end of 2003. Are you still on track for that?
Oh yeah. We are thinking about accelerating it, we are doing so well. We have more locations identified than we are willing to open at this time. We run the business, from a financial standpoint, in a very conservative manner. We dont want to overexpand. But as we generate more profits and sales continue to come in the way they have been coming in, we may accelerate our growth program pretty dramatically.
Are most of your stores in the mid-Atlantic area?
Most of our stores are between Florida and Massachusetts, from north to south, and then as far west as Utah. The bulk of the stores would be from St. Louis east.
Are you looking to expand west?
We are looking to continue to expand in the area where we already have businesses, and we think we can put as many as 200 more stores in those states. Along with that we are starting to research our expansion capability on the West Coast. Were sure we can get at least another 100 stores out in that area.
How much of the business is on the Web now?
We dont break that down individually, but almost 15 percent of our total business is done between the catalog and the Web. The customer migrates back and forth between the Web, the catalog and our stores. Were really a multi-channel retailer. If its a rainy day, they might shop on the Web. Sometimes they just peruse the catalog. We plan to continue to grow the Web site and continue to stay ahead of the technology.
Among the most traditional of suits is the seersucker. It got pretty hot here recently. Have those been selling?
We are selling a lot of seersucker suits. [They] are one of the things were known for. We do very well with those. We see that whole lighter-weight seersucker/poplin suit coming back.
You came out of semi-retirement 2 1/2 years ago to run Jos. Bank. What are your future plans?
I just signed a new three-year contract with the company, so for the next three years Im not going anyplace.
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