Tailored to the Area : Discount Men’s Clothiers Do Well in Southland
The men’s tailored clothing business has been unraveling for years, particularly in Los Angeles. The flagging economy and Southern California’s dress-down attitude have made it a graveyard for many sellers of men’s suits.
That didn’t stop George Zimmer, chairman of Men’s Wearhouse, a Fremont, Calif.-based discount suit retailer. Zimmer entered the Los Angeles market by opening 10 Southland stores in the past four months, and he plans to open a dozen more in the region this year.
“Some of our employees expressed concern when we decided to move into the Los Angeles market,” Zimmer said. “Some analysts on Wall Street questioned our decision, but we think we have a huge opportunity in the Los Angeles area.”
Indeed, while many companies are closing apparel stores amid Southern California’s economic gloom, discount suit sellers are expanding rapidly. By taking advantage of a drop in the cost of floor space and a rise in the demand for value, discount clothiers have become a rare retailing success story in the Southland.
“Los Angeles has been the most difficult area for conventional store chains,” said Alan Millstein, a New York-based apparel industry analyst. “Some stores would like to pull out of Los Angeles, which makes it all the more remarkable that Men’s Wearhouse has decided to double its presence. It’s a sign that price is more important to men. This is becoming the decade of the bargain hunter.”
Other apparel retailers are rushing in: Harris & Frank, known for decades as an upscale chain, now offers discount prices. C&R; Clothiers, which strayed from its original value-pricing strategies, is now back to its former format. And Suitmasters, a discount suit retailer that opened its first shop in Glendale last year, plans to open 10 more stores in the next two years.
To be sure, Southland clothiers are responding to well-established trends. Industry analysts say price is an increasingly important incentive because American men buy half as many suits as they did a decade ago. Price is especially important in the Southland because consumers are concerned about the state’s economic slump and because more men
are dressing casually at work in California.
“Dressing down is a trend in California, Texas and Florida,” Millstein said. “You won’t sell a lot of suits in those states if your prices are high, because men have more options.”
Men’s Wearhouse, which sells designer label suits, appears to have learned these lessons best.
Sales from its 183 stores--including those in the Los Angeles area--totaled $240.4 million, an increase of 41.1%, for the 12 months ended Jan. 29. Same-store sales--revenue from Wearhouse stores open at least a year--rose 17% for the period.
In contrast, the men’s tailored clothing business experienced a 5% decrease in sales industrywide in 1993, and several major retailers and manufacturers are also trying to cope with financial snags.
For example, Chicago-based Hartmarx, a major apparel manufacturer and retailer, filed for bankruptcy protection in December. GFT, a New York and Turin, Italy-based manufacturer of licensed designer label lines--Armani and Calvin Klein among them--lost an estimated $59 million in 1993. Its creditors may put the company on the auction block.
While many chains have been closing some of their stores--Kuppenheimer and Richmond Bros. among them--Men’s Wearhouse has expanded rapidly in recent years. The chain, which has quadrupled in size since 1988, added 40 stores in 1993. The company’s Northridge store--one of the 10 Southland stores opened late last year--was severely damaged by the earthquake, but the retailer plans to reopen in the community.
Zimmer has followed the same strategy in each of the 50 cities Men’s Wearhouse has entered. The company avoids malls and locates its stores on streets because “men don’t like huge parking lots and like to get in and out of stores quickly,” he said.
The company attracts customers with low prices on brand-name clothing with a strong cachet--recognizable brands such as Pierre Cardin, Givenchy, Halston and Yves Saint Laurent.
The company, which has stores in 21 states, also touts its service, including free pressing and follow-up calls to determine the level of satisfaction.
Zimmer has also used television advertising to raise the company’s profile, appearing in commercials in which he invokes his low-price “I guarantee it” slogan.
Much of the apparel industry will be watching the performance of Men’s Wearhouse as it expands in the Los Angeles area because of the market’s perilous history. For example, Silverwoods, a chain that operated in Southern California for 70 years, closed its 18 stores in 1992.
The former owner of Harris & Frank, another money-losing seller of upscale tailored clothing in the Los Angeles area, sold the chain to Miami-based clothier Alan Glist in 1992. Glist bought 12 of the 17 stores and saved them by changing the format.
“We now offer the same kinds of prices that you find at discount chains, because Los Angeles is a very tough market,” Glist said.
The fight for the discount suit buyer intensified when Suitmasters opened its first store in Glendale in September. The company plans to open its next store in Burbank this year, said Joe Cheon, the company’s general manager.
Culver City-based C&R; Clothiers, a longtime leader in the market, slid into bankruptcy in 1992 largely because it began to offer customers more expensive and more cutting-edge fashion, Chief Executive Paul Reisbord said.
The company, which has 34 stores in Southern California, now offers more mainstream fashion at lower prices.
C&R; saw double-digit increases in the number of suits sold during the final three months of 1993, Reisbord said.
The Rise of Men’s Wearhouse
While many men’s tailored clothing retailers are in trouble, Men’s Wearhouse is building sales and expanding rapidly.
Sales (in millions) 1993 (Projection by industry analysts based on 11 months): $237.0
Number of stores 1993: 183
