Without prior discussion, men’s retailer Jos. A Bank decided it wanted to join forces with Men’s Wearhouse. The company offered up a $2.3 billion bid to buy its competitor and Men’s Wearhouse said, no thanks.
Lead Director of Men’s Warehouse Board Bill Sechrest’s comeback was: “We believe Jos. A. Bank’s unsolicited proposal is opportunistic, subject to unacceptable risks and contingencies, and would deprive our shareholders of the value inherent in Men’s Wearhouse for inadequate consideration,” according to a company statement.
Men’s Wearhouse said they carefully reviewed Jos. A Bank’s proposal, considered all points and decided they’d be fine all by themselves. The company said its strategic plan is right on track, profitable and growing thank-you-very-much.
Men’s Wearhouse recently acquired JA Holding Inc. and the Joseph Abboud brand and said they are confident they can achieve shareholder returns “well in excess” of what Jos. A Bank would bring them.
The company also touted its leading market position and said they’ve seen $2.5 billion in sales for the last 12 months, more than two times Jos. A Bank’s sales. They’ve also reported 13 consecutive quarters of positive same store sales and expanded gross margin by 250 basis points over the same period while Jos. A Bank has had three straight quarters of declines in revenues, margins and earnings.
Growth prospects for Men’s Warehouse include opening 100 new stores, attracting more millennials and expanding formalwear market share by partnering with leaders like David’s Bridal, The Knot and Vera Wang, something the company says the Bank proposal ignored.
Men’s Warehouse president and CEO Doug Ewert added, “The Board and management team are confident that continuing our strategic plan will create more value for shareholders than Jos. A. Bank’s inadequate, highly conditional proposal.”