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JoS. A Bank To Acquire Men's Wearhouse? (New Twist Nov 26)

post #1 of 20
Thread Starter 
The consolidation of the North American low end mens suit market could be upon us! JoS. A Bank offers a cool $2.3 billion for MW
Quote:
Jos. A. Bank Makes $2.3 Billion Bid for Men’s Wearhouse
Deal Would Create Nationwide Powerhouse in Men's Apparel

Jos. A. Bank sait it made a nonbinding proposal to buy Men's Wearhouse for about $2.3 billion, a deal that could create a nationwide giant in men's apparel.

Jos. A. Bank Clothiers Inc. sait it made a nonbinding proposal to buy Men’s Wearhouse Inc. for about $2.3 billion, a deal that could create a nationwide giant in men’s apparel.

The Wall Street Journal on Tuesday reported that Jos. A. Bank approached Men’s Wearhouse about a combination of the two companies, citing people familiar with the matter.

Jos. A. Bank said it proposed $48 a share in cash for all outstanding shares of Men’s Wearhouse, a 36% premium over their closing price Tuesday. The stock was trading above $40 a share in August but sank sharply in recent weeks after posting lackluster quarterly results.

Jos. A. Bank Chairman Robert Wildrick first made the offer to Men’s Wearhouse CEO Douglas Ewert by phone Sept. 17, then sent a follow-up letter. Men’s Wearhouse has said it’s reviewing the proposal.

The transaction is expected to be funded by a combination of cash on Jos. A. Bank’s balance sheet, new equity capital and debt financing—with the new equity provided by Golden Gate Capital, a private-equity firm.

Combining Jos. A. Bank and Men’s Wearhouse could help the companies cut costs and bolster themselves in a tough sales environment. Jos. A. Bank is a more-than-century-old company with more than 600 stores selling men’s tailored and casual clothing, according to its website. Men’s Wearhouse, meanwhile, has 1,137 stores, according to its website. Its Men’s Wearhouse, Moore, and K&G stores sell suits and sport coats; the company is also in the lucrative tuxedo-rental business.

Men’s Wearhouse recently experienced turmoil in its boardroom. In June, the company’s chairman, George Zimmer, was ousted in a public spat between him and others at the company he co-founded 40 years ago, a dispute that centered on his desire to take over the company. Mr. Zimmer said at the time that he had disagreed with the company’s direction and “the board has inappropriately chosen to silence my concerns.”

With a $1.17 billion capitalization, Jos. A. Bank is smaller than Men’s Wearhouse, which sports a market value of $1.68 billion.



http://stream.wsj.com/story/latest-headlines/SS-2-63399/SS-2-349798/
post #2 of 20
Buy one mens wearhouse, get 6 free?
post #3 of 20
Thread Starter 
post #4 of 20
Doug, this is your old pal Robert. Hey, got a deal for ya. I'd like to buy your company. Since it is Thursday, I can offer 1 JAB share for every 1 MW share. However, just to let you know a little insider info, if you wait to accept until next Tuesday, we'll give you 4 shares for the price of 1.
post #5 of 20
I see the synergies of crappy clothes and mass market audience. Hopefully, this will push BB to up their quality to differentiate themselves.
post #6 of 20

Wow! This is interesting. I want to see where this goes.

post #7 of 20
Thread Starter 
Looks like MW shot it down
post #8 of 20
post #9 of 20
Thread Starter 
Lol makes me think this was some kind of a stunt from the getgo
post #10 of 20

Next, JAB will hire the founder of MW as a consultant/spokesman.

post #11 of 20
You are going to like the way you buy one suit and get 27 free.
post #12 of 20
Thread Starter 
Jos a Bank is an old company. Been around since at least the 50s. When did they start advertising their crazy sales on TV? 80s? 90s?
post #13 of 20

Think of all the Perfect Fit rewards from that transaction!

post #14 of 20
I can't believe they are turning down $2.3 billion. I'd take that money and be across the border by 5pm.
post #15 of 20
Quote:
Originally Posted by jrd617 View Post

Jos a Bank is an old company. Been around since at least the 50s. When did they start advertising their crazy sales on TV? 80s? 90s?
Jos A Bank dates back to 1905. It's 108 years old.

In the early 1980s, JAB had all of 11 stores. It was at this time that the Bank family sold the company to Quaker Oats. And a few years later, Quaker Oats sold JAB to some privately owned company whose name escapes me.

By the early 1990s, JAB was poised on the brink of bankruptcy. Senior executives were fleeing the company. Hundreds of lower level employees had to be let go. It was deeply in debt. In short, things weren't looking good at all.

So the company called in a crisis management team (The Finley Company). The Finley of The Finley Company - Timothy Finley - put 3 years of his time into saving JAB. To do this, he had the company re-focus in various ways, go more mainstream and less upscale, advertise very aggressively, outsource production, hire a company President (Henry Schwartz) who firmly believed that lower prices, frequent sales, and contemporary styling were the keys to success in the clothing industry, etc.

In short, Timothy Finley is the man responsible for turning JAB into a pale shadow of what it once was. But if he hadn't done it, JAB would likely have gone out of business back in the '90s. Like so many, many other clothing retailers went out of business.

So, this takes us to the past 15 years or so. During which time JAB has expanded to over 600 stores (as opposed to 11 stores, back when it was still the JAB we knew and loved). Ignoring a recent slump, total net sales have been consistently strong, shareholders happy, growth steady, the company has developed a national reputation and good name recognition, etc.

The old JAB couldn't survive. So it changed, and the new JAB has managed to thrive. Considering how many businesses fail to make necessary changes, and wind up going out of business, JAB deserves credit for what it's done.
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