As many of you know, I've been saying Jos. A. Bank (JOSB) has several - if not many - orange/red flags in its SEC filings, advertisements, and stores. The weekend before Hurricane Sandy, I decided to pop into the (JOSB) store in Hoboken, NJ (right across the Hudson River from Manhattan for those not familiar with the area) to see if I could glean any information before the storm hit.
I expected the streets would be empty but they were very busy with people of all ages doing all sorts of things, despite the impending doom from the hurricane. That said, I'm not sure the day I visited the store is exactly representative of a "normal" day, so keep that in mind.
- As soon as I walked in the door I noticed that I was the ONLY person in the store, in a city of 50,000 mostly white-collar residents. Perhaps a function of the day, perhaps not...
- The company advertised 70% off everything (plus a free smartphone!) through Saturday. (click to enlarge) I went on Sunday, and they still honored the discount (I didn't bother asking about the smartphone, although in hindsight, I probably should have).
- I was in the store for about 30 minutes. Throughout that time, I remained the only person in the store.
- As a result of being the sole customer, the employee/customer ratio was 5-6:1.
- When I inquired about the return policy, if I can paraphrase, the response from the salesman was "its very, very generous." My immediate thought, one I never much considered, is that JOSB is under-reserving for returns or otherwise improperly accounting for them. If I bought a leather bomber jacket to dress up like a pilot for Halloween, could I return it a few days later? If so, would I be refunded or would I only get store credit? What happens to the returned items? Do they go to an outlet/company store, back into inventory or what? I don't know, nor do I think the answers to these questions are adequately explained in the firm's SEC filings. This area will require further research/diligence and could be yet another flag I had little considered previously.
- While personally I absolutely hate being upsold (especially since research shows that in almost every situation a customer should be shown the most expensive option that meets his/her needs first), I was not impressed by the employees attempts to get me to buy a more expensive item, nor was I impressed by the serious lack of effort to get me to buy complementary and/or other items while I was there. I came in and asked for a traditional trench coat, but I don't recall them trying to sell me one of the umbrellas they had prominently displayed near the entrance to the store, a hat to complement the coat, or any other items. Maybe it was just the situation/location, but if I'm running a retail/apparel outlet I want my employees doing all of these things (without pestering/alienating the customer, of course), every damn time. If you let a customer walk out of the store with only the item he/she requested without even trying to offer them other items the customer might be interested in, you are not doing you job as a salesperson.
- Initial quality of the coat seems ok, similar to what you'd find at any mid-level department store. I'm curious to see how it holds up; if my experience with getting outerwear of similar initial quality is any indication, I don't expect it to last a season let alone several, and it's not like I'm intentionally putting it through its paces, just normal wear. If my expectations turn out to be correct, perhaps we'll get a chance to go back and check on what, exactly, that aforementioned generous return policy actually entails.
These are just a few observations from a single trip and do not represent any sort of statistically significant study and thus should not be considered such. However, this experience has given me more questions to research and seek to answer.
(This article was originally written on Nov. 2.)
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.