Jos. A. Bank CEO talks about opening outlet stores.
When you came here who was your main competitor?
Well, we were always known, and it's no secret, the company philosophy, before we came here, was we're the poor man's Brooks Brothers. ... We want to be like them, but we do it cheaper. That's kind of the way that it was. And I've always found that from a marketing perspective that being just like something but only cheaper is not really a winning proposition. So we had to really develop Jos. A. Bank into developing its own identity and its own brand.
And now the way forward is factory stores?
In the U.S., there is a very successful group of shopping centers that are devoted strictly to factory outlet stores ... probably 200 of them. And they have sales in those centers that are as good as any mall, but it's all brands with a factory outlet approach. And we are not in that space at all, except for the few outlet stores that we have [where] we just run clearance, but we don't manufacture product for them.
The best center that we are in ... is in Leesburg, Virginia. We [wondered] on our performance there, would we be getting business that is in addition to what we have now or would we be just stealing it from our other [regular] stores? And it turns out, in the factory outlet business the customers that shop in those venues are not really customers of the brands in regular venues. So we think there is a whole other business that can be developed there. We just have to get the product right and the real estate right.
You have several different levels of products?
I like to think there's a lot, but there's really three. Three within our regular stores and we would add a fourth, to go into the factory stores. Part of what has to happen in a period like this [recession] is you have to get new customers. And in the tailored clothing business it is all about market share, so the business itself isn't growing, so you have to take it from other people.
Where will the first factory store open?
It will be in Riverhead, Long Island, New York, to open in July.
What does it cost to open a factory store?
Putting one up is not a lot different than putting up the regular stores. It's about $300,000 to build the store, then you put about $300,000 of merchandise in, so it's about a $600,000 investment.
What will be different in the product ... cheaper?
If we open up 40 or 50 of these, the majority of what will be sold will be product that's manufactured for those stores, just like everybody else's factory stores. We like to say every item that we sell has a high level in quality, but as you go up in price what you're getting is additional luxury features, meaning more luxurious fabrics, more luxurious details.
So ... we are not making cheap garment, we are using more cost-effective fabrics, but sewing and everything else would be up to our high quality standard. We think there's an opportunity to step down that level of luxury one notch or so, and offer it a lower price point. We think the customers who shop there, they are aspirational ... they want to buy your brand but they don't think they can afford it in your regular venue, so there is a price sensitivity there and value sort of statement that we think needs to be made. So we are building a line for five new stores and we'll put that product in the existing seven that we have, and we'll see ... we'll know a lot by the end of the year.
SOURCE: Gazette.net
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