In one of my better articles last year, I had the audacity to compare men’s retailer Jos. A. Bank to the all-mighty Federal Reserve. I argued that Jos. A. Bank is addicted to what was supposed to be a temporary advertising campaign — buy one suit, get (insert always-increasing number here) suits free. The Fed, on the other hand, is hooked on quantitative easing.
I’ll let you read the original article. And to the Fed, I am sorry this article is not about you (but don’t despair, there is one about you in the works).
Last June, Jos. A. Bank reported absolutely miserable numbers — no surprise there — and in October it announced its intention to buy its largest direct competitor, Men’s Wearhouse, which is more than twice its size in terms of revenue. This is when things really got interesting.
Jos. A. Bank is past the point of salvation; its advertising has ruined its brand. Today that brand stands not for the quality of its clothes but only for their quantity. In fact, the first thing that comes to mind when you see someone wearing a Jos. A. Bank suit is that he has three more just like it in the closet.
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|Vitaliy N. Katsenelson, CFA, is Chief Investment Officer at Investment Management Associates in Denver, Colo. He is the author of The Little Book of Sideways Markets (Wiley, December 2010). To receive Vitaliy’s future articles by email or read his articles click here.|
Investment Management Associates Inc. is a value investing firm based in Denver, Colorado. Its main focus is on growing and preserving wealth for private investors and institutions while adhering to a disciplined value investment process, as detailed in Vitaliy’s book Active Value Investing (Wiley, 2007).