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Shares of Tailored Brands, formerly known as Men's Wearhouse, jumped more than 14 percent in early trading Thursday, a day after the company announced plans to close roughly 250 stores this year. That includes shuttering 80 or 90 full-price Jos A. Bank stores.
The announcement followed worsening sales trends at that label in the fourth quarter, with the company adding that it expects weakness there to continue into 2016. Revenues at Jos. A. Bank have gotten whacked since the company ended its ubiquitous Buy One Get Three free promotion in October.
"Over the past several months we completed a comprehensive operational review of the Tailored Brands businesses and are in the process of taking actions we believe will right-size our store base, optimize our cost structure, return Jos. A. Bank to profitability and improve other operating aspects of Tailored Brands," CEO Doug Ewert told investors.
After reiterating Wednesday that Jos. A. Bank's comparable sales dropped 31.9 percent during the fourth quarter (the company pre-announced its sales in February), management said it expects another mid-teens decline this year. That would follow the 14.6 percent slide the brand posted in the third quarter.
Ewert admitted that the transition from these promotions "has proven significantly more difficult and expensive than we expected."
"We do, however, remain confident that Jos. A. Bank offers a longer-term opportunity to profitably grow market share in the menswear business," he said.