Suit Wars Mens Wearhouse Versus JoS. A Bank Case Solution

Jos. A. Bank is a much older brand that serves a wealthier and more niche customer base. Thus, its products are more expensive. Operating with around 600 stores, the company had gone through dramatic changes to make handsome profits finally. It had expanded into sportswear, dropped the women's fashion, and also started taking orders online. 

Synergies exist as both are in the same business but have complimenting strategies that can be beneficial for both. These synergies can result in increased growth opportunities.

2. What kind of synergies, and their magnitude, do you expect in this merger?

The high amount of synergy exists between the two brands as they both have different methods of operating in the market, but their businesses overlap. This gives rise to implementing optimizing strategies to cut costs in purchasing, advertising, logistics, and general expenses. The merger can benefit from the strength of Jos A Banks' e-commerce, coupled with the market leadership of Men's Warehouse in the tuxedo business. This will result in increased revenues for the merged business and a larger customer base.

3. Why did Men's Warehouse and Later Jos. A. Bank resist the offer? How did they do it?

Companies always reject the first hostile takeover offer placed on them. Takeover defenses are used as a strategy to negotiate the price, protect shareholder's interest, or for personal benefits of the management. 

Men’s Warehouse completely rejected the offer placed on it as Jos. A. Bank was a competitor and a smaller brand than Men’s Warehouse. It adopted a poison-pill strategy by quoting a 10 percent trigger for investors. The result of this is the dilution of the acquirer's shareholding. Men's Warehouse also showed interest to buy Allen Edmonds (footwear brand).

Men’s Warehouse made a counteroffer of 1.5 Bn to buy Jos A. Bank. Jos A Bank resisted by lowering the trigger price to 10 percent. Its later bough Eddie Bauer to become large enough so it cannot be bought.