Question

Tailored Brands, the Company that owns Jos. A. Banks and Men’s Wearhouse

Case:  In 2003 Men’s Wearhouse considered adding Complementary Merchandise and Services to Bring Value to Customers

Men’s Wearhouse, Inc. is one of the largest discount men’s apparel companies in North America.  The first location of this men’s specialty store was opened in August 1973 in a strip shopping center near Houston, Texas. Thirty years later, Men’s Wearhouse operates 693 stores in 44 states in America and 10 provinces in Canada under the Men’s Wearhouse, K&G and Moore’s brand names.

MERCHANDISE

Men’s Wearhouse sells high-quality men’s clothing at prices 20 to 30 percent lower than department stores. This retailer specializes in suits and other tailored business apparel.  Other merchandise offered includes dress shirts, slacks, sports jackets, and sweaters.  As many businesses moved to a more casual dress code, Men’s Wearhouse responded by increasing the casual dress code, Men’s Wearhouse responded by increasing the casual business clothing selections in its stores.  This retailer offers both national branded attire and its own private-label brands.  Men’s Wearhouse also sells accessories such as ties, belts, and shoes.  In 1994, the company successfully added Big-and-Tall sizes to its product offerings.

LOCATION

Men’s Wearhouse stores are located in strip shopping centers adjacent to residential areas.  This proximity to the shopper’s home is a benefit for customers who must visit the store twice, once to select a suit and a second time to pick up the garment after it has been altered.  Locating outside of malls in strip shopping centers allows for a generous store size (between 4,000 and 4,500 square feet) while still controlling costs associated with rent.  Executives at Men’s Wearhouse also observed that men prefer to stay away from a crowded mall when shopping for clothing.

PROMOTION

Men’s Wearhouse uses a variety of media to inform and remind customers about its stores, merchandise, and sales events.  The company’s founder, Chairman, and CEO, George Zimmer, is the gravelly voiced spokesperson featured in both television and radio advertisements espousing the company’s memorable tag line, “You’re going to like the way you look. I guarantee it.”

SERVICES

Men’s Wearhouse is known for having a well-trained sales staff that can assist customers with their wardrobe selection.  In addition to helpful sales associated, each tailored item can be brought back to the store for free pressing when needed.  All stores have an in-house tailor to make the necessary alterations to ensure the desired fit for each garment. Another service offered at Men’s Wearhouse is the Perfect Fit Credit Card loyalty program. This frequent shopper program lets repeat customers charge their purchases, earn points toward discount coupons, and save 5 percent on all purchases placed on the card.

GROWTH STRATEGIES

One of the most profitable additions to the services provided by Men’s Wearhouse is the tuxedo rental business.  Men’s formalwear has been offered since 1999 in the United States and represented $51 million in sales in 2003.  This service offering has been so strong that it encouraged the company to (1) expand the floor space in the stores, (2) move into the dry cleaning arena, and (3) began a test for women’s bridal wear.

Because tuxedos need to be dry cleaned between each prom and wedding party, Men’s Wearhouse quickly saw the importance of acquiring a dry cleaning chain and expanding into this business.  Currently, the $7 billion dry cleaning industry is comprised primarily of small, single-facility, family-owned operations.

To launch the women’s formalwear concept, Men’s Wearhouse is test marketing two locations of its new bridal shop, Bride and Joy, in California.  These stores will offer convenient shopping for the women in the bridal party including the bride, bride’s maids, and the mother of the bride, (presume the bridal concept then was only selling merchandise for purchase).  The test stores will be located next door to Men’s Wearhouse locations in approximately 3,000 square foot stores.

To help you answer the questions feel free to look at the website for additional information about the Company’s merchandise offerings and position in the marketplace.

DISCUSSION QUESTIONS

1. Men’s Wearhouse successfully added tuxedo rental to its merchandise offerings in 1999.  Now this retailer plans to add women’s bridal wear and the service of dry cleaning.
   1. List 4 Pros for the tuxedo growth strategies with brief explanations (2 sentences) of each point if needed.  Do the same for Cons.  For Dry cleaning list 3 Pro’s and Con’s
   2. Use a format similar to the tables below for the list and explanations
      Bridal Wear 2 Pro's Bridal Wear 2 Con's Dry Cleaning Pro's Dry Cleaning Con's
      

Answer 1

Bridal Wear

• Pros
  • This product line has potential of attracting a large footfall of female audiences
  • This product line can attract greater revenue as the female buyers tend to spend more on their bridal wear
  • The demand for this product-line will not exhaust as marriages happen every time
  • This capital investment in this product-line is quite low. This is so because the raw material used for the bridal wear is usually of same material, so procurement can be cost effective
• Cons
  • There are various established brands in the market offering bridal wear
  • The customers like to opt for trusted and established brands when it comes to bridal wear. Hence they may be hesitant to opt from this product line as it is getting recently introduced
  • There can be seasonality in demand patterns
  • Inventory costs can be quite high. This is so because bridal wear require high maintenance

Dry Cleaning

• Pros
  • This offering will make the company’s outlet, a one stop solution for all wedding wear requirements
  • The capital requirement of this service is quite less
  • Package deals can be offered by clubbing this service with the sale of men’s wear
  • This service can serve as a complementary benefit with the men’s wear and bridal wear offered by the company
• Cons
  • The scope of this service can be quite limited
  • The company cannot estimate huge profits from this offering
  • Customers may be hesitant to give their wedding wear for dry cleaning as usually there is high sentimental value attached with them
  • The service can be quite risky as wedding wear are usually quite delicate and may get damaged while dry cleaning