Jos. A Bank has been scaling back on its massive discounts, and now sales are tanking.
The retailer’s “buy-one, get-several-free” deals on men’s suits, sport coats, sweaters, and more helped make Jos. A Bank a household name.
But Men’s Wearhouse, which acquired Jos. A Bank last year, recently began phasing out the promotions, saying they were no longer sustainable.
Jos. A Bank’s same-store sales fell 9.4% in the second quarter, compared to a 1% increase a year earlier.
Analysts say fewer promotions are largely to blame for the drop.
Jos. A Bank’s promotions ran so frequently that they became the butt of late-night TV jokes. But customers came to expect the deals, according to Neil Saunders, CEO of Conlumino, a retail-consulting firm.
“Moderating promotional activity is extremely difficult for Jos A. Bank, which has come to rely on highly generous offers (such as buy one, get three free) in order to drive customer traffic and [spending],” Saunders wrote in a recent research note.
The fact that Jos. A Bank has to rely on such drastic measures to attract customers is a clear sign that the brand is in need of a refresh, Saunders wrote.
To improve its appeal, Men’s Wearhouse has been introducing new clothing and shoes that are designed to attract younger customers to Jos. A Bank stores.
“It’s this focus on newness that will give us the best shot at winning a larger share of closet with existing customers and expanding our reach to new and younger customers,” Men’s Wearhouse CEO Doug Ewert said on an earnings call Wednesday.
“Bottom line: We need to give customers new reasons to shop at Joseph Bank and [give] our stores more ammunition to grow their business.”
Saunders says younger customers won’t save Jos. A Bank, however.
“Introducing Men’s Wearhouse product into Jos A. Bank stores is not the solution, especially as the audience for the latter is older and more conservative than the former,” he wrote.
Saunders said Jos. A Bank “will remain problematic” for Men’s Wearhouse going forward.
But Jos. A Bank won’t be returning to the “buy-one, get-seven-free” model any time soon.
“We know most men don’t want to buy suits four at a time,” Ewert said on the call Wednesday. “These promotional offers are not working for our customers, and they are not working for us.”