Jos. A. Bank shows profit for the quarter and year Clothier on rebound to open more stores

March 19, 1997|By Liz Bowie | Liz Bowie,SUN STAFF

Jos. A. Bank Clothiers Inc. announced its most profitable quarter since 1995 yesterday, breaking into the black for the year, and said the strong earnings would give the company room for more rapid growth in 1997.

Beating analysts' expectations, the Hampstead-based menswear retailer posted earnings of $500,000, or 7 cents a share, for the quarter ended Feb. 1 compared with a loss of $5 million, or 73 cents a share, for the same period the year before.

The company said it plans to add eight to 12 stores in existing markets.

"This company is running on all eight cylinders," Kenneth Gassman, an analyst with Davenport & Co. in Richmond, Va., said yesterday. "If you look at fundamentals behind the profit, they have executived a strong turnaround. There is nothing to believe it won't continue through 1997."

Timothy F. Finley, chairman and chief executive officer, said the company's turnaround was the result of apparel trends and a better merchandising mix in the second half of 1996.

For the year ended Feb. 1, the company said it had net income of $300,000, or 4 cents a share, compared with a loss of $13.2 million, or $1.94 a share, for the year before.

An industrywide shakeout meant reduced competition for Bank, according to Finley. But in addition, he said, fashion trends have also helped the bottom line.

"The casual trend has bottomed out somewhat. There seems to be a tendency to dress up a little," Finley said.

Bank's basic stock is suits, although the clothier also sells casual clothing.

Finley credited Executive Vice President Frank Tworecke, the former president of Merry-Go-Round Enterprises Inc. whom Bank hired in February 1996, with improving the merchandising mix and increasing sales. "He brought in a good group I think they were very effective," Finley said.

Sales at stores open at least a year, considered a key indicator of the health of a retailer, were up 5.9 percent for the fourth quarter of 1996 and increased 9.3 percent for the year. The fourth-quarter results were on top of a 6.7 percent rise in same-store sales in 1995.

The company also raised prices, increasing margins and helping the bottom line. "We had a tendency, because we had lost confidence in ourselves, to give things away," Finley said. "I think we got realistic."

The greatest sales coup for the chain of 81 stores came the week in early January that New York decided to forgo collection of its 8.5 percent sales taxes. That week, Bank's Manhattan store sold more merchandise than any other week in its history, Finley said. On one day alone, the 9,000-square-foot store sold $100,000 worth of merchandise. Normally, Finley said, a good day for the store is $45,000.

The week was more remarkable, Finley said, because if the store offered 10 percent off any other time -- more than the sales tax -- it would be unlikely to attract anywhere near the number of customers who came to shop without paying sales tax.

Pub Date: 3/19/97

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