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Jos. A. Bank Case Solution

Solution Id Length Case Author Case Publisher
1020 996 Words (4 Pages) Ram Subramanian Ivey Publishing : W14305
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The case relates to the acquisition war between two American retailers of men’s clothing. Joseph A. Bank Clothiers, Inc. is a leading retailer of classic and casual tailored clothing for men. Established in 1905, the Company sells its full range of products through 629 stores in 44 states. It also sells its products nationally through its catalog and an e-commerce website. Men's Wearhouse, on the other hand, is one of the largest specialty retailers for menswear in North America with 1,124 stores. Its stores carry a selection of suits, sport coats, furnishings, and accessories brands. It carries a full line of men's clothing along with a tuxedo rental service.

Men’s Wearhouse has put forward the offer price for JOSB’s shares at $63.50 a share. This offer is quite a pressing one since it is much higher than MW’s initial offer of $55 a share; however, the company has also imposed the deadline of March 12, 2014, for acceptance of the offer. JOSB’s management needs to make this pressing decision under pressure from its shareholders and investors.  

Following questions are answered in this case study solution

  1. Problem Statement

  2. Situation Analysis  

  3. Alternatives

  4. Recommendation

  5. Implementation Plan

Case Analysis for Jos. A. Bank

Situation Analysis  

The decision to accept the bid-offer for acquisition needs to be taken with the objective of maximizing the shareholder value and creation of synergies. At present, the management of both organizations is bearing hostilities against each other. This is indicated by the fact that JOSB made the offer for the acquisition of Men’s Wearhouse along with the threat of acquisition of Eddie Bauer. Men’s Wearhouse’s acquisition bid appears more of a retaliatory measure. Nevertheless, there are true opportunities for the creation of synergies through a merger of the two entities for it will lead to the greater reach of the distribution and greater choice for the consumers.

It is important to consider the relative financial situation of the two organizations to determine which business has a stronger financial situation:

Comparison of Key Financials




Current Assets



Total Assets



Total Liabilities



Total Equity



The data shows that Men’s Wearhouse has greater Current Assets and Total Assets than its counterpart. The total equity of Men’s Wearhouse is almost twice that of JOSB, thus, it is in a stronger position to carry out the acquisition.

Comparison of Stock Performance













In addition, when the two organizations are compared with respect to their stock performance, Men’s Wearhouse has exhibited greater consistency and stability in its stock price. As regards to the merger of the two organizations, the acquisition represents an attractive value for shareholders of both companies. The combination of the two entities will provide the shareholders of JOSB instant liquidity and considerable value for their investment. The offer price of Men’s Wearhouse represents a premium of 65% on the company's value and a premium of 56% over the closing price of the share of Jos. A. Bank.

Similarly, shareholders of Men’s Wearhouse will benefit from about $ 100 to $ 150 million in annual synergies by improvement in purchasing efficiency, optimizing service practices, cost-effective marketing and rationalization of corporate functions that are redundant. In addition, the vertical direct supply model suggests that Men’s Wearhouse will be able to improve merchandising and supply chain with the combined entity and streamline its inventory over time.


Reject MW’s Acquisition Offer & Acquire Eddie Bauer 

the first strategic alternative for JOSB is to reject the acquisition offer of Men’s Wearhouse and proceed with the acquisition of Eddie Bauer. The advantage of this approach is that the current management of the organization will be able to maintain control of the operations. The drawback of this course of action is that the shareholders of the company will become antagonistic to the current management and will try to change the management through their voting right. Also, Eddie Bauer’s acquisition may appear questionable to the investors and lending organizations of JOSB since Eddie Bauer is a failing organization. The acquisition of this organization may bring about operational inefficiencies within the company.

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