Jos. A. Bank Clothiers Inc., the men's clothing chain that has posted record sales and earnings in spite of a weakened economy, is expanding its Hampstead distribution center and headquarters to support an aggressive store-expansion program.

Bank, which announced plans in October to grow to 500 stores in five years, will add 20,000 square feet to its warehouse and boost its 320-person work force by as much as 10 percent, company officials said yesterday.

The $1.6 million expansion will bring the warehouse, including the corporate offices, to 312,000 square feet.

The warehouse is capable of distributing merchandise to 200 stores and will have capacity to serve 500 stores by September.

Bank operates 160 stores and plans to open 50 stores next year at a rate of one to two per week, mostly in existing markets.

The warehouse construction, which could start next month pending the approval of permits from Carroll County government, will add a second-floor, mezzanine level to the distribution center.

Half the space will be for sorting inventory and half for processing inventory receipts and storage.

Preston E. Silvey, an analyst with First Dallas Securities in Dallas, said he viewed the expansion plans as a positive step.

"They have to be capable of supporting 500 stores in the next few years, and it's a good thing to get it over with," Silvey said. "They're very conservative. I would assume it's very feasible financially."

The retailer will finance the warehouse expansion out of profits and cash flow, said Robert N. Wildrick, Bank's chief executive officer.

The chain's capital expenses have been about $15 million a year.

The cost of expansion "is a small amount of money in the big scheme of things," Wildrick said. "It is not a big risk. It's not a question of whether we will have 500 [stores], it's a question of how long it will take. We could accelerate our plan or reach our target by the end of '07.

"We will not under any circumstances overleverage the company to meet a timetable."

The retailer expanded its warehouse last year, a $3.7 million project that boosted distribution capacity from 100 stores to 200 stores and added state-of-the-art sorting equipment.

The computerized system tracks each store's merchandise needs by size and color.

The equipment sorts merchandise as it comes in from factories around the world, then ships the suits, sportswear and accessories to the appropriate store.

'A proven system'

"Now we're adding on to a proven system to give us more capacity and adding space to give the company more capacity, now that everything is proven and has worked great," Wildrick said.

Besides housing the distribution center and the corporate offices, the Hampstead plant also handles shipping for Bank's catalog and Internet channels, houses offices for apparel designers and merchandise managers and provides storage.

Once the chain reaches its goal of about 500 stores, by opening as many as 350 additional stores, the Jos. A. Bank concept will have reached a saturation point, Wildrick said.

Researching prototype

The chain has begun researching and planning a new store concept and expects to unveil a store prototype in the next 1 1/2 to two years, Wildrick said.

Those stores would open under a different name or a new division and require a second distribution center, he said.

"Hopefully, that would also be in Maryland, and hopefully in Carroll County," said Wildrick, who said the company has been pleased with the local employees.

The retailer has hired an additional 65 workers since completing the first phase of warehouse expansion in November last year.

"They've experienced really good growth and have continued plans for growth," said Denise Beaver, deputy director of the Carroll County Department of Economic Development. The latest expansion "will create jobs for individuals who are seeking new employment in the new year."

Bank's shares lost 31 cents yesterday to close at $21.09.