Men’s Wearhouse recently launched a new e-commerce site as a step towards providing customers with a compelling omnichannel shopping experience. The site includes expert advice from Joseph Abboud, wardrobe suggestions, intuitive navigation. The company is also testing mobile technology in an effort to improve the customers shopping experience.
Looking towards the future, Men’s Wearhouse plans to continue growth through 5 initiatives. First, the company plans to open 100 new stores, 30 of which will be finished in 2013. Second, the company will increase margins by designing and sourcing more exclusive clothing lines. Third, the company will target marketing and products to millennials. The company will develop more trendy products designed to catch the eye of the younger generation. Fourth, the company will expand its Perfect Fit loyalty program by utilizing purchasing history to help customize a personal and in store and online shopping experience. Finally, the company is developing specialty stores that will provide underserved customers with more attention. With these growth ideas and the company’s current success, Men’s Wearhouse expects its earnings per share to be between $2.70 and $2.80 by the end of 2013.
Breaking the Bank Jos. A. Bank Clothiers Inc (NASDAQ:JOSB)
Men’s Wearhouse’s main competitor is Jos. A. Bank Clothiers Inc (NASDAQ:JOSB). This company was founded in 1905, operates 603 Jos. A. Bank Clothiers Inc (NASDAQ:JOSB) stores in 44 states, and sells the same products as Men’s Wearhouse. Jos. A. Bank Clothiers Inc (NASDAQ:JOSB) had a rough first quarter of 2013 as it saw a 45% decrease in net income from $14.8 million to $8.1 million and a 2.6% drop in sales. The disappointing earnings were a result of a 270 basis point drop in the company’s gross margin that stemmed from increased sourcing prices.
Jos. A. Bank Clothiers Inc (NASDAQ:JOSB) has been using promotional activity to drive sales since the economic crisis in 2008. The strategy was designed to support the company during times of economic turmoil and has been growing weaker over the past few quarters. The company hopes to turn things around through its e-commerce site. An evolving internet presence can improve conversion rates and drive customer traffic.
Overall, Men’s Wearhouse has performed better than Jos. A. Bank Clothiers Inc (NASDAQ:JOSB) under the same economic conditions and I think it will continue this performance in the future. Men’s Wearhouse is also cheaper than Jos. A. Bank with a P/E ratio of 13.74 compared to Bank’s 15.54.
Conclusion
While I will miss Zimmer’s deep-voiced commercials, I think that separating the controlling founder from the company’s management was a good decision by the board. Men’s Wearhouse will be able to continue its planned expansion and make good choices with shareholders in mind. This combined with the company’s e-commerce and mobile growth should mean good things for its future. Unlike men’s apparel, there are no guarantees for stocks. But if you put this stock in your portfolio, I believe you’re going to like the way it looks.
Ben Popkin has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Ben is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.
The article This Apparel Stock Fits All Genders originally appeared on Fool.com is written by Ben Popkin.
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