Last Updated Apr 5, 2010 6:57 PM EDT
JoS. A. Bank only currently operates seven outlet stores in its portfolio of nearly 475 units, according to the company's annual report. The stores are only scattered through four states: Georgia, Maryland, Pennsylvania and Virginia, all relatively near its home base of Hampstead, Md.
Executives were pretty quiet about their outlet plans during the company's fourth-quarter conference call, though R. Neal Black, president and chief executive, did mention it as a "growth initiative" and said that an announcement will be made in the "next couple weeks" It makes one wonder if outlets could be part of the 30 to 40 new stores planned for this this year.
Maybe one of the reasons JoS. A. Bank hasn't opened many outlet stores is that it does just fine without them. The company consistently turns in great sales and earnings numbers. In the last fiscal year, earnings rose 22 percent, hitting $71.2 million and sales at stores open at least a year rose 6.3 percent.
And after all, Black stressed that the retailer already sells "high quality products at compelling prices." Still, it's curious that JoS. A. Bank wasn't more aggressive with its outlet-store roll out. If its full-priced line is doing so well, it only stands to reason that discounted items would perform even better in this economic environment. Department stores like Saks (SKS) and Bloomingdale's have seen the value in opening off-priced stores and are expanding accordingly.
JoS. A. Bank might need to open outlet stores now because management has no other option to grow the business. Black said that his team still forecasts a total of 600 full-priced stores across the country. If the retailer continues to open 30 to 40 stores annually, the company will hit that peak in five years.
Plus, outlet centers are a good place to be right now. Simon Property Group (SPG), the largest owner of outlet properties, recorded sales per square foot of $500 in that part of its portfolio. In malls, Simon's sales per square foot were only $433.
JoS. A. Bank is doing just fine in this economy. But outlet stores are a great opportunity to reach more customers at a lower price point and spur even more future growth.