Fast-rising web sales star in Jos. A. Banks earnings

Multichannel classic apparel retailer Jos. A. Bank Clothiers Inc. today announced a 6.6% increase in sales for the fiscal year ended Feb. 3 over the previous year. Internet sales, the fastest- growing channel, is cannibalizing catalog sales, the company said. Total sales for the Hampstead, Md.-based retailer were $206.3 million, up from $193.5 million in 1999. Net income was $5 million, compared to recurring net income of $3.3 million the prior year. For the year, sales at josbanks.com increased 188% and catalog sales decreased 11.7%, primarily due to cannibalization from the Internet. For the fourth quarter alone, Internet sales increased 157% and catalog sales decreased 14.1%. In-store sales rose 6.8% for the year and 14.6% for the quarter.

The figures reflect a cross-channel strategy in which the web site is promoted with displays in-store as well as in the catalog, where the josbanks.com URL appears on every other page, says David Ullman, executive vice president and chief financial officer. Also helping to drive up Interrnet sales was the company’s in-house relaunch last August of the web site it had formerly outsourced. The move, says Ullman, has allowed the company to react to sales trends in real time and remerchandise on the site accordingly. "We didn’t have as much flexibility when we were outsourcing the site," says Ullman. "For example, merino wool sweaters and winter coats turned out to be very big sellers for us across the chain last year, so we made sure they were featured in promotions on the web site during the holidays. Once the catalog is out there, there’s not much you can do."

While underscoring that the catalog is a stand-alone profit center for the company and an important part of its brand awareness, the migration of more sales to the Internet helps the company sell economically, Ullman adds. "From a pure cost standpoint, once you’ve got a live site it’s less expensive to take an order and complete a transaction over the Internet. We want our customer to come to us through whatever channel they want to. But if our customer makes the choice to shop on the Internet, that’s okay."