New style, an old tailor

Change: An old-line clothier is struggling at a time when its signature product -- business suits -- are less popular.

November 14, 1999|By Lorraine Mirabella | Lorraine Mirabella,SUN STAFF

Robert N. Wildrick threaded his way through the sprawling headquarters plant of Jos. A. Bank Clothiers Inc., past tailors adjusting garments, operators taking catalog orders, warehouse workers preparing rack upon rack of perfectly creased, ready-to-ship pants.

In his first week on the job as chief executive, he'd already weathered criticism for just stepping in -- mostly because the last retail chain he headed went out of business. He knew that sagging sales and stock prices clouded Bank's future. He saw that customers in droves were discarding suits for more casual dress.

And he couldn't have felt better.

"I like the fight, and the chance to win against huge odds," said Wildrick, who had dreamed of life as a chief executive officer ever since becoming a Bamberger's trainee more than 25 years ago. "There is huge competition out there, and it changes every day."

Despite stiff competition and the flagging popularity of the suit -- on which the Hampstead retailer built its reputation -- the chain of 108 men's tailored clothing stores had thrived over the past few years. But 1999 has proved disappointing. In May, former CEO Timothy J. Finley stepped down, with the board of directors reportedly unhappy with his performance.

Now, analysts are calling the chain "rudderless." Sales were down at stores open at least a year -- a key benchmark -- by 6.2 percent in the third quarter. Earnings sank 12 percent in the second quarter and are expected to drop in the third quarter too when they are released.

In October, the company revised its projected 1999 earnings from 65 cents per share to a range of 50 cents to 60 cents per share. Bank's stock, which peaked at just over $8 per share this year, closed at $3 Friday.

Ambitious plans to expand stores from the mid-Atlantic to the Midwest, Northeast and South, have been scaled back. And a strategy to focus more on corporate casual wear has taken off in fits and starts.

"I see very little upside for the next three quarters; it will be summer before [Wildrick] can implement anything," said Holly L. Guthrie, an analyst with Janney Montgomery Scott Inc. "I don't think Jos. Bank moved quickly enough toward fashion casual apparel. There has to be a flow of new ideas. Without anyone at the helm, there wasn't any strategic direction."

That goes back several months before Finley stepped down, she said, when he and the board were negotiating to sell the chain. The talks ended when the sides failed to agree on price, said Wildrick, who said he could not disclose the prospective buyer.

Besides internal turmoil, Bank has had to face an industry-wide reality. Men are buying and wearing fewer suits. And that has been a crushing blow for men's specialty retailers such as Brooks Brothers, S&K Famous Brands Inc. and the 94-year-old, home-grown Jos. A. Bank. Most, like Bank, are trying to adapt.

"If you don't evolve, you don't survive," said Wildrick, 55, who has served on Bank's board of directors since 1994.

"We are going to continue to focus very hard on the men's clothing business, but the fact of the matter is, the suit business is declining.

"This is a company that has a good infrastructure and some wonderful people, in a business that is not a growth business. The challenge is how to get a bigger piece of a smaller pie."

Wildrick's appointment Oct. 21 has been praised and criticized.

When it hired a retail search firm, Bank's board set out to find someone with merchandising roots. But directors also wanted a seasoned chief executive, someone who could run a public company and deal with banks and Wall Street, said Andrew A. Giordano, chairman of the board. Giordano had served as interim chief executive.

`No learning curve'

"There were very few people who would meet our specifications, and by the time the process was complete Bob was not only the best candidate, but with five years' experience as a board member, there was no learning curve at all," Giordano said.

Wildrick built his reputation as a merchandising specialist over two decades with Belk Stores, where he rose to senior vice president for merchandising, overseeing merchandising, product development, sales promotion and store operations. He then headed Venture Stores Inc., a Target-like discount chain that closed in the summer of 1998.

"In a very tough, competitive market, he knows the retail business very well and how to manage. He does a terrific job in enhancing shareholder value -- not at the expense of the employees," said David B. Chisholm, a managing director with Deutsche Bank in Chicago, who said Wildrick has "tremendous credibility" with bankers and vendors.

"In my business, you have the opportunity to work with a lot of people in big public companies," said Chisholm, who put together a line of credit for Wildrick at Venture.

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