Jos. A. Bank Sets the Bar High
It was the late '90s and Jos. A. Bank Clothiers was floundering without direction. The trend toward the casual workplace was tolling a death knell for men's suits, and nobody had any belief in the men's wear business, much less a vision for the company.
That from Robert Wildrick, who was at that time a member of the board, and part of a nine-month search for a new CEO. He finally found one. For the past three and a half years, Wildrick has been at the helm of the $243 million and growing Jos. A. Bank.
CEO Wildrick - whose vita includes a comprehensive roster of experience in just about every area of apparel retailing - has turned things around for the 98-year-old retailer with a strategic plan that emphasizes quality, customer service and accountability, the latter encouraged by a company-wide, results-based compensation plan.
Becoming a Household Name
"What's happened with the company is we've come from what was known as a 'poor man's Brooks Brothers' to a company that's really a brand, in and of itself," says Wildrick.
How did that happen? The company cut out the middleman and took control of its production, including sewing sourced worldwide. Jos. A. Bank designs almost all of its products, specifies or buys its piece goods and makes its patterns. "By doing that, we control the quality and the consistency of design, and we can make sure all the colors coordinate, which is really key," says Wildrick.
While visiting Jos. A. Bank's headquarters in Hampstead, MD, to research this article, Apparel saw evidence of the firm's commitment to quality in its warehouse and distribution center (DC). There were rows and rows of garments flagged as "defective," but close inspection revealed offenses barely visible to the eye. "As soon as we accept those, we're no longer Jos. A. Bank," explains Gary Merry, senior vice president and CIO.
As Wildrick emphasizes: "The big thing from the standpoint of being a brand is having quality that's predictable and high."
One high level of quality. Three "levels of luxury." That's the Jos. A. Bank way.
While the more luxurious and higher price-point levels may be differentiated by a higher thread count, or greater detailing, everything is manufactured to the same quality specifications. Although its target customer is typically a career man older than 28 with a household income of more than $75,000, the company's three levels of luxury are designed to provide high quality to men of all stations, from the new college graduate to the CEO. "We can take them through their whole life, and that's what we endeavor to do," says Wildrick.
The design of the clothing isn't leading edge but rather updated traditional. One of the company's particularly successful innovations is its trio concept, a three-piece product offering that includes a suit jacket, matching pants and coordinated pants, providing several mix-and-match opportunities with just a few basic pieces.
Fabric innovation trumps radical styling developments at Jos. A. Bank, whose designers make semi-annual trips to the Premiere Vision show in France in search of the latest fabrications, plus regular visits to Como, Italy, for silk. Still, when it comes to styling and construction, the company maintains an unremitting focus on small details to make its products unique. For example, the fall/winter 2003 season's merino wool sweaters were a cut above the rest with a slightly different look and fabric that included very high-end zinia yarn, Wildrick reports.
"We try to take items that are about to become a commodity and change them around so they still have a fashion look. But we don't do anything radical. We just make slight changes so the customer stands out and looks just a little bit better and a little bit different. Sometimes people can't ascertain what the difference is, but they know it's there," says Wildrick.
Expanding the Brand
"What we want to be is the total men's haberdashery," says Wildrick. In line with this goal, the company sells everything from formal wear to underwear. "And we keep broadening our assortments," he adds.
Indeed, rather than sit back and hope that business-casual would just be a short-lived trend, Jos. A. Bank evolved with the times. "A few years ago, we sold 42 percent of our business in suits. Now, less than 30 percent is suits. While other people were chasing after the suit business, hoping it would come back, we just developed the other business," says Wildrick.
To complement and encourage sales of its expanded offerings, the company redesigned its stores, displaying impulse merchandise at the front and destination merchandise in the back, which has been a positive factor in this transition.
As for new product offerings, a big part of the retailer's business is now in performance products, such as wrinkle-free wool, cotton and linen. In fact, its "traveler," a wrinkle-free 100 percent cotton dress shirt, has become a leading seller, says Wildrick.
Reaching into other areas, the company also developed its VIP - Vacation in Paradise - brand. This line has a summer-oriented theme, although it is available year-round. For the avid golfer, Jos. A. Bank has developed a line with David Leadbetter, the world's No. 1 golf instructor, says Wildrick. Leadbetter tests products to ensure they are suitable for on-the-course comfort and play before Jos. A. Bank proceeds with production.
On the other end of the sartorial spectrum, the company sells - but does not rent - tuxedos. "We think that our customer is one who would rather own his tuxedo. [Also,] we don't want to have our name in anything that's of lesser quality, and when you rent a tuxedo, you have to be able to adjust the waist, lengths, and all that. We want things that have our name in them to be something a guy is proud to have," says Wildrick. One of those proud customers? Former President Jimmy Carter accepted his Nobel Peace Prize attired in a Jos. A. Bank tuxedo.
Expanding the brand hasn't come only at the product level. With more than 425 stores, Jos. A. Bank has recently been opening new store locations at a fever pitch, with 50 openings planned this year, 75 next year and 100 each in 2005 and 2006. That's no small feat in a troubled economy in which many apparel retailers are downsizing their expansion plans.
But from Wildrick's perspective, the company's plans for store expansion are conservative. The company has been fine-tuning its expansion program, opening eight, 20 and 25 stores, respectively, during the past three years. Now that the system is "fully honed," the company has pushed its expansion goals upward. With Jos. A. Bank stores concentrated in the east, Wildrick comments: "We still have most of the United States to grow into."
Satisfying the Customer
Adding to its upscale image is Jos. A. Bank's emphasis on customer service, which it achieves through a focus on professionalism - encouraged by a sales force that works on commission. The company seeks to provide local-men's-wear-store professionalism on a national-chain basis, explains Wildrick. Associates who make it through the first year generally don't leave the job, which can mean as much as $100,000 a year for the top sellers, with the average about $40,000. "We give them the tools to make money. It's almost as if they're running their own business," notes Wildrick.
The company's focus on customer service includes tailoring/alteration services at each of its stores, as well as a corporate card program, which provides lifetime discounts to corporations with as few as five employees.
Jos. A. Bank also serves its customers by providing multi-channel shopping opportunities. Through its stores, catalogs and Web site, customers can shop anywhere, anyhow, anytime.
Interestingly, this three-pronged approach to selling has been particularly beneficial to the company in terms of reinforcing the strength of its in-stock program. Because the company has to keep inventory on hand for its Internet and catalog sales, it is better equipped to replenish its stores quickly. Conversely, the company has a "higher fill rate than anybody" for its Web site and catalog - it is in stock 94 percent to 95 percent of the time - because of the inventory it maintains for its stores, says Wildrick. "We have a lot of ways to satisfy the customer," he remarks.
Case in point: Although sales were tough in February because of the heavy snow this winter, Jos. A. Bank's catalog and Internet business boomed.
Keeping Up with IT
Echoing its fashion philosophy, Jos. A. Bank "is not looking to be on the 'bleeding edge' of technology," says CIO Merry. The company works from a strong platform of proven solutions, and continues to enhance and build on those efficiencies, he explains.
For example, the company employs the Island Pacific suite of solutions for merchandising, CommercialWare solutions for cataloging, and Tradewind from Datavantage for its POS system. Its designers use Gerber CAD systems, while the DC employs sortation devices from W&H Systems. This year the company plans to spend $1 million on IT upgrades alone.
One of its major initiatives is to organize data electronically to better tune its individual stores to the customers in their regions, says Wildrick. The main issue is timing merchandise flow to optimize sales, i.e. making sure that swimsuits go to Florida when needed and heavy coats to Massachusetts.
The company also is trying to learn more about its Web customers by analyzing their Internet "hops" (the online paths they have taken to the Jos. A. Bank site) as well as their computer operating systems. From this data, the company can develop profiles to help predict regional and individual buying behavior, explains Merry.
The company developed its own e-tailing site, which has proven successful as well as cost effective. It was recently named one of the top 25 e-tailing sites in the United States by Internet Retailer. "We took a proven product and customized it for our Internet system . and we put it in for less than $1 million. That's something that everybody else in the world is spending about $10 million on," quips Wildrick.
Overall, what the company strives for is systems that are strategic, as well as necessary and understandable, says Wildrick. "A lot of CIOs just waste a lot of money because they like a lot of bells and whistles," he remarks. "We always try to see if there's really a return on investment.
"Companies like Wal-Mart, that are very successful, make it constantly easier for the customer to do business with them. People that make it harder are going to fail. And the same is true for IT departments," he concludes.