Jos. A. Bank chairman 'delighted' with rebound Efforts of past year are paying off, Finley tells investors

June 13, 1996|BY A SUN STAFF WRITER

Timothy F. Finley stood in the same place for the same reason as he had 363 days before. But things don't seem to be the same for his company, Jos. A. Bank Clothiers Inc.

After last year's glum annual shareholders meeting, Finley, Bank's chairman, spoke yesterday of a promising future, standing before about 25 investors, officers and others at the Sheraton Inner Harbor Hotel.

"We came through with flying colors," Finley said. "I'm extremely pleased and delighted we're having this kind of success."

Buoyed by sales of tailored clothing, Bank recently reported that sales in stores open at least a year -- a key indicator of

performance -- rose 8.6 percent. Despite a protracted industry slump, the Hampstead-based retailer with 81 stores also generated $1.1 million in operating income for the first quarter ended May 4, compared with an operating loss of $6.2 million over the same period last year.

Shareholders noticed the difference.

"I think the mood is a lot more positive, a lot more upbeat," said investor Paul Eckert, a vice president at First National Bank of Maryland who likes the retailer's clothing so much that he also works part time as a Bank sales associate. "It definitely seems like things are starting to turn up."

Until the recent turnaround, pressure had been mounting, Finley had declined to take a bonus over the past two fiscal years, and he said, "I haven't had a lot of fan mail."

But Finley established a frenetic pace over the past year, liquidating the chain's line of women's wear, shuttering its Hampstead sewing factory, streamlining store operations, obtaining a $40 million loan extension from its bankers and hiring former Merry-Go-Round Enterprises Inc. executive Frank Tworecke as executive vice president and chief merchandising officer.

Only the Tworecke hiring generated some consternation. Tworecke, according to Bank's proxy statement, is earning a $200,000 annual base salary in 1996. In the second and third years, he will earn $400,000 annually. In addition, he is entitled to other compensation, including a $175,000 bonus in fiscal 1996 and up to 50 percent of his base salary in performance bonuses in each of the second and third years.

"I don't understand the thinking that went into this type of [deal]," said Richard Ash, a Philadelphia shareholder.

"Yeah, it's a rich contract on the surface," Finley said, but he praised Tworecke's merchandising acumen and added, "I think it's money well spent."

Tworecke's impact will be felt in August when Bank rolls out a redefined assortment of tailored clothing. Segmented into three categories, the collections are defined as:

"Executive," a clothing line for entry-level workers, or middle managers.

"Corporate," a label for customers who are moving up the company ladder and want to make a statement.

"Signature," which is considered top-of-the-line merchandise for high-ranking executives.

The chain, Tworecke said, will also eliminate its Premier and Natural Resources labels, beef up its casual wear line with more golf-related clothing and expand what it calls "dressy casual," the jacket-but-no-tie look.

On a broader scale, Bank continues to look into acquiring another retailer, expects to close two undisclosed stores in less than a month and plans to open five stores by year's end: two in both Washington and New York and one in Jacksonville, Fla.

Finley said after the meeting: "I think we're focused now."

Pub Date: 6/13/96

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