The Federal Trade Commission ruled Friday that the Men's Wearhouse takeover of fellow clothing retailer Jos. A. Bank Clothiers can move forward after the agency found that the combined company would not violate antitrust laws.
"Despite limited competition from the Internet, the transaction is not likely to harm consumers because of significant competition from other sources," the commission wrote in a blog post about the decision. "There are numerous competitors that sell suits across the range of prices of the suits the merging parties offer, including Macy's, Kohl's, JC Penney's, Nordstrom, and Brooks Brothers, among others."
The commission also said the tuxedo rental market — a major source of business for Men's Wearhouse — would not be affected because of Bank's limited focus on rentals.
Men's Wearhouse told investors Friday that it expected to close the $1.8 billion transaction for Hampstead-based Bank within the next 30 days.
"We are pleased. ... Together, Men's Wearhouse and Jos. A. Bank will have increased scale and breadth, and Jos. A. Bank's strong brand and complementary business model will broaden our customer reach," said Doug Ewert, president and CEO of Men's Wearhouse.
The merger was announced in March after months of failed takeover bids between the leadership of Bank and its larger Houston-based rival. The FTC approval is the last regulatory hurdle the companies face.
The combination of the nation's two biggest men's apparel specialty chains would create a $3.5 billion retail powerhouse with 1,700 stores across the United States and about 23,000 employees that analysts said could compete better with department stores and online sellers.
Bank executives have said previously that Maryland job losses are likely as a result of the merger. The company employs about 780 people in Carroll County at its headquarters and distribution facilities.
In the post discussing its decision, the FTC also noted that the companies offer different products that reflect different customers.
"Men's Wearhouse, which sells branded and private-label suits, has a younger, trendier customer set, while Jos. A. Bank, which sells private-label suits only, has an older, more traditional customer base," the commission wrote.
For that reason, the companies have said, Bank and Men's Warehouse will remain separate brands with separate stores.
Shares of both retailers jumped on the news. Men's Wearhouse shot up 3 percent to $49.78 a share, while Bank's stock climbed 85 cents to $64.95 a share, close to the $65-per-share acquisition price.Copyright © 2014, The Baltimore Sun