Saturday, December 12, 2015

Men's Wearhouse

Companies go out of business for a number of reasons.  One is changing consumption patterns.

Recently, Jos. A. Banks was bought by Men's Wearhouse, and everyone is piling on as to what a crappy deal this was and how they are fucking up a great company.   One of those people piling on is the iconic founder of Men's Warehouse.

But something else is at work here - a profound change in consumer buying habits that neither company was able to spot and capitalize on.

Not long ago, if you worked at an office, you had to buy what we called "office clothes" which often included a number of suits.  I once had a closet full of suits, when I worked at law firms back in the 1990's.

"Distrust any enterprise that requires new clothes." --Henry David Thoreau 

But over the years, something changed - something profound.  It really struck me when I visited a tech firm in Austin, Texas.   No one wore suits anymore.  Everyone wore "office casual" clothes - a uniform of a different sort.   Izod-type shirts and khaki pants were the new office uniform.  Sneakers replaced polished leather shoes.  Gone was the suit jacket, the starched shirt and the necktie, all victims to higher office temperatures (to save energy) and our new casual lifestyle.

It struck me then that our generation won, in a manner of speaking.   When I went to work for GM in 1978, I had to buy suits and ties, such was the order of the day.   But our generation liked a more relaxed feel.  And by 1998, well, we were in charge and we changed the rules.

By then, wearing a suit was horrifically out of place.   I recall visiting the offices of one defense contractor in Tyson's Corner, Virginia, and I was the only person in the place wearing a suit.  I actually had some young Engineers snicker at me.   I believe that is the last time I wore a suit, quite frankly.

And this is not a new trend.   John F. Kennedy shocked some Americans by not wearing a hat, even on inauguration day.  The days of haberdashery were over.   And not long before then, wearing gloves was considered de rigeur for a gentleman.  One by one, we have shed these old-fashioned clothing styles - and our clothes, to the point today, we are dressed in little more than underwear.

And indeed, underwear it is.  The short pants and t-shirt of today, back in 1880, would be considered undergarments and indecent as well.   Maybe this is an effect of global warming, but it seems we are more naked than ever before.

Whatever the cause, times have changed and styles have changed.  No one wears suits anymore, for the most part.  The few that do are the very rich, who can afford tailored bespoke suits.  The market for mid-level and entry-level quality suits has largely evaporated as the lower and middle classes no longer wear suits (yes, there was a time when even blue collar workers wore suits!).

Yes, at one time you would not think of leaving the house without your hat and gloves, suit jacket and overcoat.   And of course, you would stop off and have your shoes shined.   For ladies, the same was true only moreso.   Hatmaking was big, and the wearing of hats was not an occasional thing, but something you had to do every day.   Today, the only hats men wear are the kind they give away with names of tractor parts companies on the front.   Ladies might wear some sort of sun hat, like a "shitkicker" cowboy hat, just to keep the sun off.   But the amazing "crowns" of yore?  Gone and gone for good.

So it is not surprising that Jos. A. Banks and Men's Wearhouse would merge.  In a shrinking market, consolidation is the way to survive.   And Jos. A. Banks technique of "buy one suit, get five free!" is long past its sell-by date.   Back in 1980, maybe you'd need five or six suits to fill out your closet (one for every day of the week, at least) but today?   Maybe you don't even need one.

So what will happen to Men's Wearhouse/Banks?   Likely, Bankruptcy - eventually.   Just as the Habadashery and Millinery and the glove shop went away, so will the suit store, particularly the low-cost and middle-priced suit store.

And some may decry this as a sign of the end times or the end of our civilization.   But it is merely a change in spending patterns.   We no longer go to malls or shop at Sears.   We've given up on J.C. Penny for the most part.   You don't buy a "Stereo" at Radio Shack anymore.  New products and new spending habits have taken over.   And those who cannot adapt to new patterns of consumption end up on trash heap of history.

Our behaviors have changed as well.   We no longer play bridge (note: hate mail from the five remaining bridge players will not be answered!) or tennis, for that matter.   A lot of things that seemed permanent and institutionalized are dead and gone today, and we haven't even had a funeral for them (elaborate funerals being another tradition that has changed/evaporated over time).

People today still spend a lot of money on clothes, just different types of clothes.   A kid today will spend more money on a "Abercrombie" hoodie (which is already out of style) than I did on an entire suit.   Women still love to shop and will spend enormous sums of money on these high-heel boots that go all they way up to their crotches, along with a pair of "skinny jeans" and whatnot, at the "Forever 21" store.  Showing off your sophisticated tastes and how much you spent hasn't gone away, it's just changed.

For men, money is no longer spent on suits, but we will spend more on our sneakers than an entire suit can cost.   And in the tech world, spending $50 on a t-shirt is a sign you've "made it".

So while I feel bad for the Men's Wearhouse guy, whose gravelly voice was once a staple on the airwaves, I don't think that the reason his company went down the tubes has to do with "mismanagement" or a "merger gone wrong" but instead a marketplace that has profoundly changed, and a company selling products people no longer need or want.

So what's the point of all of this?   Well, first of all to notice how we've changed very slowly over a number of years.   No one said, overnight, "OK, no more suits!" and we switched the next day to jeans and a t-shirt.  It was a gradual change - so gradual that no one noticed it, and moreover, people who ran companies selling these products failed to notice it.

Second, if you are young and think the world isn't being run the way you like it, just wait a decade or two.   Your generation will make its mark on the world, for better or worse, in a few short years.   When I was in my teens, we dicked around with computers and dressed casually.  And our parents said, "why are you wasting time with those stupid computers?  And put on some decent clothes, for chrissake!"

And what happened was, we won.  We became the mangers and owners of businesses, as we got older.  And the products we invented replaced products that our parents thought were important.   And the cycle continues today.  For my generation, the "Personal Computer" was a revolutionary device - and it created the information revolution that we have today.  These days, having a PC marks you as a fossil.  Only old people use actual desktop computers or laptops.   Having a pad or phone is the "in" thing now, right?

So to you young people, just be patient.   Your time will come, and you may discover, to your horror, that many of the wacky ideas your peers have end up going mainstream, with mixed results.

Third, when investing in something, realize it can be a fad and disappear in a real hurry, or that even an old-line entrenched company that seems like an unstoppable juggernaut, can go away in a real hurry.  When I was a kid, IBM, Xerox, Kodak, Dupont, General Motors, and other "blue chip" stocks were the things to have in your portfolio, as these were huge companies that cranked out dividends like clockwork, and clearly were not going anywhere!   People will always need cameras and photocopiers and mainframe computers and cars and whatnot, right?

Today, well, these one unstoppable juggernauts are mere shadows of their former selves.   What was a blue-chip investment in 1970 or even 1980 might be today's penny stock.

I wish the people at Men's Wearhouse the best of luck.  But quite frankly, I haven't set foot in one of their stores since I went to the Severn Corners store back in 1999.   A business model based on selling suits?  In 2015?   Who are they kidding?