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Men Dress for (Retail) Success
As males increasingly focus on improving their wardrobes, retailers and manufacturers follow suit -- and the strategy is paying off
Men are getting spiffy. The pendulum of workplace fashion has swung sharply back from khakis and polo shirts to suits, blazers, and dress shirts, all of which are selling briskly again. Advertisement
The numbers speak for themselves: Jos. A. Bank Clothiers (JOSB ), a chain of 318 stores for mens tailored clothing and footwear, says its sales soared 20.7% in December in stores open at least a year. Its catalog and Internet sales jumped 34.1% in the same month. The Men's Wearhouse (MW ), a 720-store chain, said December same-store sales jumped 8.1%. "The growth comes from men's suits and sports coats," says George Zimmer, founder and CEO of Men's Wearhouse, which sells tailored business attire (see BW, 11/1/04, "Spiffing Up Men's Wearhouse").
It all started a couple of years ago, when manufacturers noticed that young male's shopping habits were starting to mimic those of women. Their interest in personal grooming gave birth to a host of products in the men's face care, aftershave, and deodorant aisles of pharmacies and department stores. Unilever (UN ) introduced Axe, Procter & Gamble (PG ) repositioned Old Spice, and Beiersdorf's Nivea for Men and Johnson & Johnson's (JNJ ) Neutrogena Men gained popularity. This trend also gave birth to the term "metrosexual," representing male consumers who like to shop and look good.
WHITE-COLLAR CONCERNS. Retail consultant Wendy Liebmann of WSL Strategic Retail says she has seen a blurring of lines in the shopping habits of men and women. In the same vein, good fit and the tailored look have become just as important for men as they are for women. Wall Street has rewarded companies that have responded to these changing attitudes. Men's Wearhouse stock is now trading at $31.83, off its 52-week high of $37.44, but still up 47% since January, 2005. And Jos. A. Bank's shares are trading at $47.38, off slightly from their 52-week high of $50.78, but up 64% in the past year (see BW Online, 6/10/05, "For Dear Old Dad, Stocks Beat Socks").
Many men are choosing the neat look because they feel the need to appear professional in an uncertain employment environment, where white-collar jobs are moving offshore, say retail experts. At the same time, men are spending more time shopping for themselves, especially twentysomethings. "Younger men have been raised in dual-income households, where they have always shopped for themselves, as opposed to mom buying their things like in previous generations," says Annette McEvoy, a New York retail consultant.
Research done by WSL Strategic Retail shows that 74% of men today personally decide what they buy for themselves. There's also a change in where these men shop -- 50% of younger men prefer to buy at discount clothing stores, compared to 22% in 2002. No wonder a chain like Men's Wearhouse has benefited, given that its price points are 20% to 30% below those at department stores.
Plus, these men's stores offer a nonthreatening experience. "Men's Wearhouse offers a comfortable men's shopping environment with knowledgeable sales representatives who can put together a simple wardrobe for not a lot of money," says Jason Asaeda, retail equity analyst at Standard & Poor's.
TECH ADVANCES. These same men are taking off their polo shirts and donning dress shirts. So it makes sense that Phillips-Van Heusen (PVH ) on Jan. 10 raised its fourth-quarter earnings forecast to 37 cents per share from 28 cents per share. The apparel maker estimates that quarterly revenue will be between $470 million and $475 million, an increase of 14% to 15% over the year-earlier quarter. Its stock is now trading at $34.97, near its 52-week high of $36.83, and a gain of 32% from January, 2005.
Dress shirts, which represent 25% of the total portfolio, have been the strongest part of the business for Phillips-Van Heusen, which makes dress shirts for the Van Heusen, Chaps, Kenneth Cole, Geoffrey Beene, and Calvin Klein brands. "Men wear dress shirts in three different ways: One is the dress shirt with the tie, one is the dress shirt without a tie, and at night as casual wear," says Mark Weber, CEO of Phillips-Van Heusen.
Male shoppers are also responding to technological advances that make clothing wrinkle-free, stain-resistant, and water-repellent -- clearly great reasons to update a wardrobe. Research firm NPD Group found that 61% of shoppers who bought clothes last year were lured by the wrinkle-free aspect, 47% by the stain-resistant quality, 45% by the water-repellent attribute, and 38% by adjustable waistbands.
Such advances have fueled sales at Jos. A. Bank Clothiers. "Sportswear and performance products have had strong sales, particularly our Traveler all-cotton, stain-resistant pants and our Traveler all-cotton, wrinkle-free sport shirts," says Neal Black, chief merchandising officer at Jos. A. Bank.
EXPANDING HORIZONS. These men's specialty stores have been so successful that even the real estate community is taking notice. Developers of new shopping centers want to ensure that they include such stores to attract this demographic of shoppers. "We're now considered first on the real estate community list on every new development that comes online. This is markedly in contrast to five years ago, when we weren't even on any lists," says Jos. A. Bank Chief Executive Robert Wildrick.
With mall developments introducing these stores to newer locales, more men may be trading in their sweats for suits -- which looks good for retailers poised to cash in on the boom.