Battling to Dress Philly Men

Christopher's is not the only company poised to fill the sartorial void left by Today's Man. Hampstead, MD-based Joseph A. Bank Clothiers Inc. operates 11 units in this region and sees the Philadelphia/Baltimore/DC corridor "fertile ground for aggressive expansion," a company spokesman tells GSR. Houston-based Men's Wearhouse, has 15 stores within 60 miles of Philly."There's pretty solid growth in both men's casual and formal workwear," says Kevin Foll, senior specialty retail analyst for Chicago-based Next Generation Equity Research LLC. "In general, the (men's clothiers) market is not an over-stored environment, and there's differentiation among the retailers in it. The best-selling suits for Men's Wearhouse, for instance, are between $200 and $300, while Joseph A. Bank's best seller is over $800." "Without question, the closing of Today's Man is responsible for our entry into the Philadelphia-area market," Vincent Rua, Christopher's president and CEO, tells GSR. In an attempt to turn around "a listing ship," Rua says, "we submitted a formal asset purchase agreement (for Today's Man) that was accepted by the bankruptcy court." Despite the approval, Today's Man's assets went to Ozer Group, a Needham, MA-based liquidation company. Frank Morton of Ozer tells GSR it did not have an interest in the real estate and says, "some of the units, four or five, were sold to Men's Wearhouse."

"In my opinion, Men's Wearhouse wanted to get Today's Man off the market," says Rua. "We planned to take over from 18 to 20 of the Today's Man stores." GSR's calls to Men's Wearhouse were not returned by press time.

During due diligence for the Today's Man offer, Rua, an accountant, says, "I saw the success Today's Man had –about $50 million –in the Philadelphia market. There's no risk-free opportunity, but I didn't enter this business to own just one store. We put together a $6-million financing package to enter the Philadelphia market."

He points to "the proven track record of Today's Man," plus the "relative advertising efficiency of the Philadelphia market versus others" as Christopher's rationale for expansion here. Ad costs in the New York market, for example, would be 40% more expensive, he reasons.

Christopher's opened in the Shops at Liberty Place in Center City in the first week of October. Another unit will open at Montgomeryville Mall in North Wales, PA next month, and a lease for a site on Roosevelt Blvd. in Philly, where Christopher's will compete head-to-head with Men's Wearhouse, commences next April. Bala Cynwyd, PA-based Michael Salove Co. is in search of additional sites –as many as eight more, Rua says –primarily in the Philadelphia suburbs. These units will be in the 3,000-sf to 6,000-sf range, smaller than the Christopher's 15,000-sf flagship.

While Joseph A. Bank now has about 237 units in 36 states, and Men's Wearhouse operates approximately 690 stores in 44 states, "there's only one Boyd's," boast promotions for the 70-year-old Philadelphia institution that occupies a 48,000-sf store at 1818 Chestnut Street. So far, that is. "We have tentative plans to expand long term," Kent Gushner, president, tells GSR, "but nothing within the next 18 months." He would not say where or in what numbers Boyd's eventual expansion may reach. "We walk before we run," he says. "Our business is pretty solid, and we'll expand slowly and in an intelligent way." Meanwhile, Boyd's is expanding its women's section "in a serious way," according to Gushner.

Of the onslaught of competition, he says, "Because we are so large and diversified in all menswear categories, we don't view the others as direct competition, but as indirect competitors who each compete with us in one of several areas. Increased competition is good," he adds. "It means the market is fertile."

Rua is equally aware of the increase in competitors and mentions Boyd's among them. "Our competition is everybody," Rua says, "but we think we have distinctions. To the one-million-plus people who enjoyed Today's Man we offer a wider selection of fashion products. For those who enjoy a better specialty store, such as Boyd's, we offer refreshingly affordably fashion. We have the most affordable fashion clothing available. We're not a discounter, and, unlike Boyd's, we don't exclude anybody. We start at $199 for a suit and go all the way up to full custom. Our custom shirts start at an unbelievable $50 opening price. We only offer a couple of swatches in that grade," he acknowledges. "We respond to a market's demand, and then, it's all a matter of inventory management." Regarding sales per sf, he says, "we're going to new markets, so it's risky to predict, but, among our existing stores, we average between $400 per sf and $500 per sf. That significantly beats our competition," he asserts.

Asked about future Christopher's expansion, Rua repeats, "I didn't enter this business to own one store. We have to prove ourselves, but would consider raising more money, possibly through a public offering, and 200 stores on the East Coast would be all right with me. That could be done through acquisition, but I don't want to show my hand any more than that."