Clothier closes Hampstead factory Jos. A. Bank trims 100 jobs

November 14, 1995|By Alec Matthew Klein and Timothy J. Mullaney | Alec Matthew Klein and Timothy J. Mullaney,SUN STAFF

Jos. A. Bank Clothiers Inc. finally pulled the trigger yesterday on the long-speculated closing of its Hampstead sewing factory, a decision that the retailer said will create "substantial savings" but eliminate about 100 workers from the payroll.

The 35,000-square-foot factory, which manufactures suit jackets and sports coats, will close in early February and may be sold or put to some other use.

Already, 28 employees have been transferred to the company's tailoring division. The other workers will receive what was described as standard severance packages. Representatives of the local Union of Needletrades, Industrial and Textile Employees could not be reached for comment yesterday, but Bank Chairman and Chief Executive Timothy F. Finley said, "We've gone overboard to keep these factories going. We're the last major player still manufacturing its own tailored clothing."

With the closing of the Hampstead factory, Mr. Finley said the company would derive six-figure savings annually as it hooks up with manufacturers with cheaper labor in other parts of the United States.

The factory closing met with approval from analysts.

"If they shut a factory down, it would immediately reduce their overhead dramatically," said Kenneth M. Gassman Jr. of Davenport & Co. in Richmond, Va. But he added that the company's financial disclosures don't specifically identify the cost of producing clothing in Hampstead. "That's the bottom line."

Bank is not abandoning manufacturing. The retailer is holding onto its two other factories, both in Baltimore: on Brookhill Road, which cuts fabrics for coats and slacks, and on North Avenue, which makes coats and pants.

The Hampstead factory closing coincided yesterday with the company's announcement of third-quarter sales in men's clothing, which dropped 14.7 percent to $30.8 million from $36.1 million over the same period last year.

For the nine months ended Oct. 28, sales in men's clothing fell 1.4 percent to $98.8 million from $100.3 million over the same period last year.

Sales in stores open at least a year, a key industry measure of performance because it factors out new stores, fell 12.3 percent for the quarter and 6.7 percent for the nine months.

The results were weak compared to some of the company's main competitors, S&K Famous Brands of Richmond, whose comparable-store sales were flat during the quarter, and Men's Wearhouse of California, whose sales rose 8.2 percent. Today's Man of New Jersey, like Bank, showed a 11 percent drop in same-store sales for the quarter.

But Mr. Finley said, "It's a lot better than I thought it would be."

The company had anticipated lower results with the launch of its new line of casual wear, which required the retailer to focus its advertising campaign on the new product rather than on promotional sales.

In addition, Bank was affected by an industry one-two punch: a trend away from tailored clothing and a decline in catalog sales, prompted by the higher cost of mailings and paper.

Bank has already begun to show signs of a reversal as sales in men's clothing have picked up by about 20 percent to date in the fourth quarter. Moreover, the new line of casual wear has shown early signs of success, accounting for about 13 percent of men's sales.

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