For years, menswear retailers watched helplessly as sales declined. Between dress-down workplace dress codes and the male aversion to recreational shopping, it was difficult to generate traffic in men's specialty stores and men's sections of department stores.
No lure — even drastic price cuts — seemed to reel them in.
But lately retailers say that men are coming back. One big factor: With the Internet 1990s a fading memory, men are getting back into suits and ties. “I certainly see signs of life,” says Russell Hoss, an analyst at Roth Capital Partners, especially for classic business attire. Nordstrom sales associates told him they had never seen such strong menswear demand as during a mid-July weekend sale. “After 10 years of a depressed market, I'm encouraged.”
Menswear margins have edged up — to nearly 32.5 percent in April from about 30 percent last August, according to Morgan Stanley. Women's wear, though still boasting higher margins, declined — to 50 percent in April from about 55 percent in August. “We've been seeing very early signs of a possible upturn in men's apparel,” he says.
More proof comes from the encouraging June sales growth figures of some retailers. Men's Wearhouse comp sales, for example, rose 7.6 percent in June. JoS. A. Bank Clothiers Inc.'s comps climbed 15.2 percent; a year earlier, sales dropped 3.7 percent.
The good news has been a long time coming. For a while, it looked like men not only weren't buying new styles, but they weren't even replacing their old clothes. In the face of sluggish demand, Today's Man Inc. went bankrupt. Gadzooks chucked men's clothes. Target Corp. cited men's apparel as one of its weakest areas. Menswear has also long underperformed women's at department stores and specialty retailers such as Gap Inc. and Abercrombie & Fitch Co. And after dumping the Structure brand name last year, Limited Brands is turning its Express stores into dual gender concepts at the rate of 40 to 50 per year.
AND THE SURVIVORS ARE…
It's not good news for all menswear firms. The real winners, analysts say, are those that offer tailored, classic clothes — the duds men need now to go to work. Even out-of-work men, and there are many of them, need a nice suit for interviewing.
“With four players now left in the specialty channel (Men's Wearhouse, JoS. A. Bank, Brooks Brothers and S&K Man), their growth will likely have to come from the department store/chains,” says Brian Tunick, a JP Morgan analyst in a recent report. They're also trying to divvy up the $130 million in menswear sales that's up for grabs following the closure of Today's Man.
Analysts view the recent encouraging signs as indications that men are replacing their wardrobes after years of neglect. “It's part of the replenishment cycle,” says Bill Baldwin, an analyst with Baldwin Anthony & McIntyre Securities in Dallas. One trend that's helping Men's Wearhouse and JoS. A. Banks is the return to dressier wear. The difference between now and the booming 1990s, however, is that men want less expensive suits, analysts say. Men's Wearhouse, for example, attributes part of its recent success to expanding its lower price-point inventories. Dino Speranza, Men's Wearhouse senior vice president of store operations, says 30 percent of its suits sell for less than $200, compared with 15 percent in that price range last year.
Men's Wearhouse comps are also being helped by its strategy to rent tuxedos in its 505 stores nationwide. That's a high-margin sideline, which also brings younger men into the store for the first time, says Speranza. About 700,000 will be rented in 2003, up from zero in 2000, according to JP Morgan.
Men's Wearhouse remains confident. It's looking for space for a fourth store in Manhattan, two in Brooklyn and some in New Jersey to grow its New York metropolitan business. “We expect our business in the second half to be stronger,” Speranza says.