Suitmaker Jos. A. Bank Clothiers Inc., facing a slow apparel market and trying to serve an increasingly dressed-down work force, has removed Henry "Chick" Schwartz as president and chief merchandising officer and promoted other managers.
The change comes amid spotty sales for the Hampstead-based company and more declines in its stock.
Mr. Schwartz, a well-known menswear veteran hired in 1990 to spruce up Bank's conservative suits, is now vice chairman, according to an internal memo dated March 9 that was obtained by The Sun.
Timothy F. Finley, chairman and chief executive, has assumed Mr. Schwartz's duties as president, the memo said. At the same time, several junior executives have been given new merchandising and store-operation responsibilities.
Mr. Schwartz encouraged the new arrangement, he and Mr. Finley said in interviews yesterday.
"Come on, I'm 64 years old," Mr. Schwartz said. "We have some tTC young people here. They have to feel like they can move up."
Mr. Schwartz's new duties will include helping with merchandising and "many facets of the operation where I need him," Mr. Finley said.
Bank posted a robust gain of 8.2 percent in same-store sales in the three months that ended Jan. 28. Since then, however, same-store sales have been negative, said two people familiar with the company.
Those sources cautioned against drawing too many conclusions from the recent sales slump. February and early March are relatively slow, unimportant parts of the retail year, they said. And last year Bank was promoting its goods more heavily.
Still, a record trading surge in Bank's stock on Tuesday and a new low price seemed to indicate investors' discontent with Bank.
New York-based Donaldson Lufkin & Jenrette Securities Corp. brokered the sale of a block of 586,700 Bank shares on Tuesday at $2.50 per share, down 75 percent from the $10 per share investors paid when Bank went public last spring.
Average daily trading volume for Bank has been 34,000 shares. The company has 7.1 million common shares outstanding.
The DLJ trader who handled the deal declined yesterday to disclose the seller's identity. Bank officials said they didn't know the identity.
As of December, only four Bank stock owners held more than 500,000 shares: Apollo Advisors, 726,311 shares; Alliance Capital Management, 672,224; State Street Research and Management, 651,200; and Soros Fund Management, 616,401.
Because it holds a Bank board seat, Soros would be required to notify the retailer if it unloaded shares and hasn't done so, said Matt Kahn, Bank's chief financial officer. Executives at the other three concerns declined to comment or did not return phone calls.
An analyst at Daniel H. Renberg & Associates, of Beverly Hills, Calif., said his firm sold its 68,000 Bank shares several weeks ago.
Yesterday, Bank stock closed at $3 per share, up 12.5 cents from Tuesday's close.
Bank, which has operated in Maryland for decades, sells mainly men's business clothing through catalogs and stores. In recent months, executives have been introducing more-casual careerwear, now that blue suits and white shirts are the standard in fewer and fewer offices.
"The movement to casual dress makes it difficult for shirts, ties and suits," said Laurence Leeds Jr., managing director at Buckingham Research Inc. in New York.
"It makes it pretty good for sports jackets and nice slacks. That's the bright side."
At Bank, Mr. Schwartz was known for adding double-breasted models, pleated trousers and other updates to the company's conservative line. Formerly president of Hartmarx Specialty Stores, Mr. Schwartz "is a renowned name in the men's business," said Howard Davidowitz, a New York retail consultant.
Bank's new executive vice president for merchandising is Jim Thorne, who was hired as a buyer in the mid-1980s and rose through the ranks. Dan Randolph, a former executive for London Fog Corp., is Bank's new executive vice president for store operations, the company memo said. Martin Ferrara was promoted to executive vice president for catalog operations.
"When you start changing your merchandise, you need some new guys," Mr. Finley said.
The more-casual lines will be fully introduced this fall. Bank remains profitable, has ample capital and the full confidence of lenders and suppliers, Mr. Finley said. However, he added, "We're in transition. You have to understand that when you look at the first half of the year."
Bank will close its unprofitable store in Omaha, Neb., and there are "three other very small locations that we're reviewing, and my guess is they will not close," Mr. Finley said. Bank has 83 stores.