Joseph A. Bank’s answer to the recession

Today’s Retail Wire discussion focuses on Joseph A. Bank, and its latest sales-driving offer: Refunding $199 to any suit purchaser who subsequently loses his job in the next few months. My reaction:

Joseph A. Bank has staked out an interesting market position for itself: Men’s traditional clothing (especially suits and sport coats) at highly promotional prices. They have staked out a value posture far below Brooks Brothers or even most department stores (with some expected compromises in quality), and have a less updated point of view than Men’s Wearhouse stores. Barely a week goes by without a deep discount on men’s clothing, including an offer after the holidays of “Buy a suit, get two free.” Their last earnings release indicates the formula seems to be working.

The latest promotional idea is a good one: It highlights the bargain-basement prices for suits that Joseph A. Bank is known for, and draws potential shoppers off the fence if they are hesitating to spend money on career clothing right now. The downside risk to Joseph A. Bank (refunding $199 if the customer loses his job) is relatively small compared to the likely increase in sales and brand awareness. Good idea!

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