Men's Wearhouse (NYSE:MW) reported a drastic decline of 14.6 percent in comparable store sales for Jos. A. Bank, and comparable sales are down 35 percent thus far in this quarter, Fortune reported.
Men's Wearhouse was eager to buy out its rival Jos. A. Bank last year for $1.8 billion, so much so that it put in an unsolicited offer and created the fourth largest men's apparel chain in the United States.
In the fall, the parent company eliminated Jos. A. Bank's legendary promotions of "buy one suit, get three free" to offer more modest deals. CEO Doug Ewert called the deals unsustainable for the company, yet it also turned off former customers.
In contrast, the flagship brand has had only one quarter of decline in the last four years. But as a result of the new purchase, shares were down 20 percent and the company was valued at $710 million, just more than one-third of what it paid for Jos. A. Bank.
Ewert said he was considering every way possible to cut costs, including closing stores and cutting staff. He's also hired turnaround experts Alix Partners. However, he will not dump the Jos. A. Bank brand.
"This is a core brand for us. It attracts a different customer than we see in any of our brands. This company is in our sweet spot from a strategic standpoint, and we're going to turn this around," Ewert said in a conference call, according to Fortune.
-See this Fortune article
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