Jos. A. Bank Clothiers Inc., the struggling Hampstead-based retailer, is holding confidential talks about buying one or more men's apparel companies and an undisclosed number of stores, its executives said yesterday.
If completed, the moves would slightly boost employment at Bank's headquarters, add to its 85 stores and presumably increase sales. Bank managers declined to identify the companies involved in the discussions.
Timothy F. Finley, Bank's chairman and chief executive, characterized the negotiations as part of "the normal course of business" but added that an acquisition deal could replace sales that were lost when Bank decided to leave the women's wear trade this year.
The company also said that it lost $2 million in its third quarter, but blamed most of the result -- $1.8 million -- on costs associated with getting out of women's wear.
For the same period last year, Bank reported earning $100,000.
Bank also spent $1 million on TV ads during the third quarter, much more than usual, to promote its new lines of sports and casual clothes.
"If you reverse that, they sort of made a profit, and maybe a profit above last year," said Kenneth M. Gassman Jr., a retail analyst with Davenport & Co. in Richmond, Va.
"The numbers, on their face, look terrible, but in fact maybe things aren't as bleak as we might think."
Bank has struggled for 18 months, ever since it sold stock to the public at $10 a share, with an extremely slow national apparel demand and a shift away from traditional suits and ties to more casual office attire.
The company recently added lines of sweaters, vests, twill pants and other casual attire to take advantage of the trend, and sales have exceeded expectations, Mr. Finley said.
The new lines are "almost 20 percent of our business" already, he said. "We expected it to be 13."
Third-quarter men's clothing sales, previously disclosed, were $30.8 million, down 14.7 percent from $36.1 million in the same period last year. Men's clothing sales in stores open at least a year fell by 12.3 percent in the latest quarter, compared with the same period in 1994. The third quarter ended Oct. 28.
But sales results so far this quarter have improved, Bank officials said.
November men's clothing sales jumped by 14 percent over last year, which itself represented an 8 percent gain over 1993's results. So far in December, men's clothing sales are even with those of December 1994, which was a record sales month for the company.
Because it no longer sells women's lines, Bank excluded women's results from last year's comparative figures. Total sales in the third quarter of 1994 were $45.6 million.
Despite Bank's problems, Mr. Finley is confident that the company could pay for an acquisition. "We've talked to our lender," he said. "We could finance it under our line [of credit] or internally."
Bank stock touched $1.50 per share yesterday, a new low, before closing at $1.88. But Mr. Gassman attributed it to year-end, tax-related selling.
"I'm not quite ready to give up on it," he said.