Men’s Wearhouse Owner Tumbles After Citron Shorts Ailing Companyby and
Tailored Brands Inc. shares plunged as much as 13 percent after Citron Research founder Andrew Left said he’s betting against the struggling owner of Men’s Wearhouse and Jos. A. Bank.
Left said in a phone interview that he’s been shorting the company for “a while” and may release a report on the retailer next week. He pointed to a comment Tailored Brands made in its latest annual report about its risks: “Despite our high indebtedness level, we will still be able to incur significant additional amounts of debt,” the company said.
The move brings fresh woes to a retail stock after a harrowing stretch for the industry. Department stores Macy’s Inc. and Nordstrom Inc. plunged this week after reporting disappointing earnings and bleak forecasts for the year.
Shares of Houston-based Tailored Brands fell as low as $12.34, capping their worst week of the year. More than 4 million shares traded, triple the daily average for the past year.
Tailored Brands, formed after the merger of Men’s Wearhouse and Jos. A. Bank, has struggled to align the two divisions. Last year, management abandoned Jos. A. Bank’s “buy one suit, get three free”-style promotions, irking longtime shoppers. That sent the chain into free fall. Jos. A Bank’s same-store sales plunged 32 percent in the most recently reported quarter, compared with a 4.3 percent gain for Men’s Wearhouse.
Tailored Brands, which specializes in men’s suits, has an enterprise value of $2.26 billion, of which $1.65 billion is debt.
The company didn’t immediately respond to a request for comment.