The Joseph A. Banks (JOSB) selling machine is kicking on all cylinders – yesterday’s quarterly numbers were proof of that (see article I wrote for Market Watch).
My gripe (and Herb agrees) with the management is that they decided that no Q&A is needed after the quarterly conference call. I completely understand why the company’s management may decide to spend their time on a more productive endeavor than answering sell side analysts’ questions which most of the time have little to do with the company’s long-term future, but zero in on minute, often irrelevant short-term details. That being said, management should have done a better job communicating to the Street the change in Q&A practice.
JOSB’s marketing strategy is the weakest link in its business model. It is extremely short-term oriented and not about long-term brand building. I’d argue that it cheapens its brand. Where Men’s Warehouse’s (MW) “I guarantee it” commercials tell you about product quality and a pleasant shopping experience (long-term brand building strategy), JOSB commercials sound like it’s a cheap car dealership that you’d expect to see in the deep suburbs of nowhere land, with a very annoying voice that tells you something along the lines of, “Only this Tuesday, the whole store is 50% off!” But don’t worry, if you missed this Tuesday special, there are other days of the week; Wednesday, Thursday… you get the point. Yesterday, while reading JOSB’s latest 10Q, I heard the commercial at least three times on CNBC. This short-term driven marketing strategy is responsible for the volatility of same store sales.