Article Excerpt:
TWST: What is Jos. A. Bank Clothiers?Mr. Wildrick: Jos. A. Bank Clothiers is 100 years old this year. It started with a tailor named Joseph Bank, who then began to develop factories and sell goods factory to you for around 50 years. He sold his business to Quaker Oats in the 1980s, and the Joseph Bank family was then out of the business. Quaker Oats took over and began to expand the company and decided that they would rather be in the food business than in the apparel business. They sold it in the late 1980s to some leverage buyout people who owned other retailers. In 1989, the business was struggling very seriously and on the brink of Chapter 11, and the bondholders brought in a turnaround man who worked very hard to stabilize the business until 1994. At the end of 1994, the business was stabilized and went public. However, very little happened with the business from 1994 through 1999. In fact, the market cap, which today is over $400 million, averaged in those years about $29 million. So the market cap has grown dramatically. In 1999, the board decided they needed to bring in some very experienced retail people and develop a strategic plan for the growth of the company or the sale of the company. We explored both pieces of that, and actively put plans in place to do both. But in the end we decided to grow the company and not sell it. We were able to recruit a very high-talent management team, put a very significant growth plan together, and the company, without increasing debt, in the last five years once we report this year, will have made more than $60 million in profit, will have increased the market cap by about one-third of $1 billion and will have gone from approximately 100 stores to close to 300 with a long-term plan in place over the next three years getting the company to 500 stores. The way this occurred is the new management team came in and immediately went to work on quality and put in some of the best quality control systems in the business, number one. Number two, the prior management also had begun to buy from a huge number of middlemen. The new management team went back to our design and manufacturing base, thereby cutting out the middlemen and kept the profit for shareholders. We also took a portion of the savings and re-invested it into product quality and the infrastructure to expand the company. So the company became immensely profitable and really has been the fastest growing menswear company in the United States for the past five years.
Tickers included in this excerpt: JOSB
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