82-Creative Price Reductions to Gain Share
Not too many of us today would like to be in the retail clothing business. Fine retailers world-wide are suffering a dismal decrease in demand. Jos. A. Bank Clothiers has bucked the trend.
Jos. A. Bank used creative discount pricing to grow its same store sales while around them competitors faced margin carnage. For one day in September, and again for a few days after Christmas, the company offered a “buy one suit, get two free” sale. This was just one of its gimmicks. There have been several others. The company’s sales have grown by double digits in the past three quarters, and same store sales have grown at 7%. (See the Perspective, “Achieving the Low Cost Position” on StrategyStreet.com.)
The company is frank about its approach to pricing in this environment. They are looking to gain market share. These pricing gimmicks would not work unless competitors cooperated. The competitors for Jos. A. Bank must allow them to gain share with discounts by refusing to match their pricing promotions. It looks like Jos. A. Bank succeeded here, at the expense of their competitors.
The company, founded in 1905, operates around 200 retail locations. Its parent company is Tailored Brands. The parent company also owns K & G Fashion Superstores, Men’s Warehouse and Moores Clothing for Men in Canada. In 2014 Jos. A. Bank merged with Men’s Warehouse to form the new entity Tailored Brands. Both companies appeal to a similar segment but approach it differently. Jos. A. Bank sells only its own collections and creates product only for its own retail locations. They are able to tailor their dress pants and jackets. In contrast, Men’s Warehouse sells outsourced brands such as Vera Wang, Calvin Klein and Ralph Lauren which generally cannot be altered. Covid and its cultural shift in fashion put so much pressure on both companies that Tailored Brands declared bankruptcy at the end of 2020.
Jos. A Bank and Men’s Warehouse are forms of Price Leader products. Jos. A. Bank is a Predator product claiming to offer men’s clothing items at a quality comparable to that offered by more expensive retailers. Men’s Warehouse is a Stripper product offering last year’s branded products at low prices. HERE is more information about Price Leader products.
THE SOURCES FOR STRATEGYSTREET.COM: For over 30 years we observed the evolution of more than 100 industries, many hostile. We put their facts into frameworks applicable to all industries and found patterns. Strategystreet.com describes the inductive results of these thousands of observations and their patterns.