Men’s suit sales jump in economic downturn. Christina Lee/MNS
WASHINGTON — The white collar male might be bringing in more business for retailers even as analysts expect a mild recovery in overall spending. While the financial sector experienced huge job losses in the economic downturn, one Maryland-based men’s retailer has benefitted in tough conditions before.
“It happened after 9/11 and it happened after the financial crisis. I think it just means that the workplace gets serious,” said Neal Black, president and CEO of Jos. A. Banks. “And when the workplace gets serious, guys put on the suit and tie again.” The company has achieved earnings growth for the past 33 of 34 quarters, bringing in a 22 percent increase to $71.2 million in net income for 2009.
A series of promotions–such as the current buy one suit and get one suit, two shirts and two ties for free–have helped bolster sales. Suits start at $550 and go up to just under $2000.
Independent investment research firm Morningstar Inc. forecasts sales at premium retailers to outperform the broader retail category for the year but doesn’t expect such huge profits from the balance of the year or even from the Memorial Day weekend.
“It’ll still be a positive holiday season but we won’t see the big numbers we saw early in the spring season, where there was a big spending push from a lot of pent-up demand,” said Morningstar retail analyst RJ Hottovy.
And economists remain cautious about consumption’s role in the recovery as well.
“On the whole, the consumer is responding to fundamentals—mostly disposable income and household net worth, but we still have some headwinds,” said economist Richard DeKaser, president of Woodley Park Research. “Credit difficulties are still impairing the housing market and consumer credit is nowhere as easy as it used to be.”