e10vk
UNITED STATES SECURITIES AND
EXCHANGE COMMISSION
Washington, D.C.
20549
Form 10-K
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(Mark One)
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þ
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXHANGE ACT OF 1934
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For the fiscal
year ended January 29, 2011 (Fiscal year
2010).
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
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For the transition period
from to .
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Commission file number 0-23874
JOS. A. BANK CLOTHIERS,
INC.
(Exact Name of Registrant as
Specified in Its Charter)
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Delaware
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36-3189198
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(State or Other Jurisdiction
of
Incorporation or Organization)
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(I.R.S. Employer
Identification No.)
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500 Hanover Pike, Hampstead, MD
(Address of Principal
Executive Offices)
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21074
(Zip Code)
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Registrants
telephone number, including area code
(410) 239-2700
Securities registered pursuant to Section 12(b) of the
Act:
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Title of Each Class
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Name of Each Exchange on Which Registered
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Common Stock, $0.01 par value per share
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The NASDAQ Global Select Stock Market LLC
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Securities registered pursuant to Section 12(g) of the
Act: Rights to purchase units of Series A Junior
Participating Preferred Stock
Indicate by check mark if the registrant is a well-known
seasoned issuer, as defined in Rule 405 of the Securities
Act. Yes o No þ
Indicate by check mark if the registrant is not required to file
reports pursuant to Section 13 or Section 15(d) of the
Act. Yes o No þ
Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of
the Securities Exchange Act of 1934 during the preceding
12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been
subject to such filing requirements for the past
90 days. Yes þ No o
Indicate by check mark whether the registrant has submitted
electronically and posted on its corporate Web site, if any,
every Interactive Data File required to be submitted and posted
pursuant to Rule 405 of
Regulation S-T
(§ 232.405 of this chapter) during the preceding
12 months (or for such shorter period that the registrant
was required to submit and post such
files). Yes o No o
Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of
Regulation S-K
is not contained herein, and will not be contained, to the best
of the registrants knowledge, in definitive proxy or
information statements incorporated by reference in
Part III of this
Form 10-K
or any amendment to this
Form 10-K. o
Indicate by check mark whether the registrant is a large
accelerated filer, an accelerated filer, a non-accelerated
filer, or a smaller reporting company. See the definitions of
large accelerated filer, accelerated
filer and smaller reporting company in Rule
12b-2 of the
Exchange Act. (Check one):
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Large
accelerated
filer þ
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Accelerated
filer o
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Non-accelerated
filer o
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Smaller
reporting
company o
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(Do not check if a smaller reporting company)
Indicate by check mark whether the registrant is a shell company
(as defined in
Rule 12b-2
of the
Act). Yes o No þ
The aggregate market value of the voting and non-voting common
equity held by nonaffiliates of the registrant, based upon the
closing price of shares of Common Stock on the National
Association of Securities Dealers Automated Quotation
(NASDAQ) Global Select Market at July 31, 2010
was approximately $930.2 million. The determination of the
affiliate status for purposes of this report on
Form 10-K
shall not be deemed a determination as to whether an individual
is an affiliate of the registrant for any other
purposes.
The number of shares of Common Stock outstanding on
March 23, 2011 was 27,622,054.
DOCUMENTS INCORPORATED BY REFERENCE: The Company will disclose
the information required under Part III,
Items 10-14
either by (a) incorporating the information by reference
from the Companys definitive proxy statement if filed by
May 30, 2011 (the first business day following
120 days from the close of its fiscal year ended
January 29, 2011) or (b) filing an amendment to
this
Form 10-K
which contains the required information by May 30, 2011.
JOS. A.
BANK CLOTHIERS, INC. AND SUBSIDIARIES
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Page No.
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PART I
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Item 1.
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Business
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1
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Item 1A.
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Risk Factors
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12
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Item 1B.
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Unresolved Staff Comments
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20
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Item 2.
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Properties
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21
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Item 3.
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Legal Proceedings
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21
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PART II
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Item 5.
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Market for Registrants Common Equity,
Related Stockholder Matters and Issuer Purchases of Equity
Securities
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22
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Item 6.
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Selected Consolidated Financial Data
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Item 7.
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Managements Discussion and Analysis of
Financial Condition and Results of Operations
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25
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Item 7A.
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Quantitative and Qualitative Disclosures About
Market Risk
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35
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Item 8.
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Financial Statements and Supplementary Data
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35
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Item 9.
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Changes In and Disagreements with Accountants on
Accounting and Financial Disclosure
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36
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Item 9A.
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Controls and Procedures
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Item 9B.
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Other Information
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PART III
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Item 10.
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Directors, Executive Officers and Corporate
Governance
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Item 11.
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Executive Compensation
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41
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Item 12.
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Security Ownership of Certain Beneficial Owners
and Management and Related Stockholder Matters
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Item 13.
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Certain Relationships and Related Transactions,
and Director Independence
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Item 14.
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Principal Accounting Fees and Services
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41
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PART IV
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Item 15.
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Exhibits, Financial Statements Schedules
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42
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Report of Independent Registered Public
Accounting Firm
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F-1
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Consolidated Balance Sheets as of
January 31, 2010 and January 29, 2011
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F-2
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Consolidated Statements of Income for the Years
Ended January 31, 2009, January 30, 2010 and
January 29, 2011
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F-3
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Consolidated Statements of Stockholders
Equity for the Years Ended January 31, 2009,
January 30, 2010 and January 29, 2011
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F-4
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Consolidated Statements of Cash Flows Equity for
the Years Ended January 31, 2009, January 30, 2010 and
January 29, 2011
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F-5
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Notes to Consolidated Financial Statements
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F-6
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Signatures
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Exhibits Index
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Exhibit 10.2 |
Exhibit 10.3(e) |
Exhibit 10.5(c) |
Exhibit 10.6(e) |
Exhibit 10.8(g) |
Exhibit 10.10 |
Exhibit 10.11(d) |
Exhibit 21.1 |
Exhibit 23.1 |
Exhibit 31.1 |
Exhibit 31.2 |
Exhibit 32.1 |
Exhibit 32.2 |
CAUTIONARY
STATEMENT FOR PURPOSES OF THE SAFE HARBOR PROVISIONS
OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 AND
OTHER INFORMATION
This Annual Report on
Form 10-K
includes and incorporates by reference certain statements that
may be deemed to be forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995.
The Private Securities Litigation Reform Act of 1995 provides a
safe harbor for certain forward-looking statements
so long as such information is identified as forward-looking and
is accompanied by meaningful cautionary statements identifying
important factors that could cause actual results to differ
materially from those projected in the information. When used in
this Annual Report on
Form 10-K,
the words estimate, project,
plan, will, anticipate,
expect, intend, outlook,
may, believe, and other similar
expressions are intended to identify forward-looking statements
and information.
Actual results may differ materially from those forecast due to
a variety of factors outside of the Companys control that
can affect the Companys operating results, liquidity and
financial condition. Such factors include risks associated with
economic, weather, public health and other factors affecting
consumer spending, including negative changes to consumer
confidence and other recessionary pressures, higher energy and
security costs, the successful implementation of the
Companys growth strategy, including the ability of the
Company to finance its expansion plans, the mix and pricing of
goods sold, the effectiveness and profitability of new concepts,
the market price of key raw materials such as wool and cotton,
seasonality, merchandise trends and changing consumer
preferences, the effectiveness of the Companys marketing
programs, the availability of suitable lease sites for new
stores, doing business on an international basis, the ability to
source product from its global supplier base, legal matters and
other competitive factors. The identified risk factors and other
factors and risks that may affect the Companys business or
future financial results are detailed in the Companys
filings with the Securities and Exchange Commission, including,
but not limited to, those described under Part I,
Item 1A. Risk Factors and Part II,
Item 7. Managements Discussion and Analysis of
Financial Condition and Results of Operations of this
Annual Report. These cautionary statements qualify all of the
forward-looking statements the Company makes herein. The Company
cannot assure you that the results or developments anticipated
by the Company will be realized or, even if substantially
realized, that those results or developments will result in the
expected consequences for the Company or affect the Company, its
business or its operations in the way the Company expects. The
Company cautions you not to place undue reliance on these
forward-looking statements, which speak only as of their
respective dates. The Company does not undertake an obligation
to update or revise any forward-looking statements to reflect
actual results or changes in the Companys assumptions,
estimates or projections.
PART I
General
Jos. A. Bank Clothiers, Inc., a Delaware corporation organized
on June 22, 1982 (herein referred to as the
Company, Jos. A. Bank, our
company, first person pronouns such as we,
us, or our, or similar terms), is a
nationwide designer, manufacturer, retailer and direct marketer
(through stores, catalog and Internet) of mens tailored
and casual clothing and accessories and is a retailer of tuxedo
rental products. The Company sells substantially all of its
products exclusively under the Jos. A. Bank label through its
506 retail stores (as of January 29, 2011, which includes
12 Outlet and Factory stores and 14 Franchise stores) located
throughout 42 states and the District of Columbia in the
United States, as well as through the Companys nationwide
catalog and Internet (www.josbank.com) operations.
The Companys products are targeted at the male career
professional and emphasize the Jos. A. Bank brand of high
quality tailored and casual clothing and accessories. The
Companys products are offered at Three Levels of
Luxury, which range from the original Jos. A. Bank
Executive collection to the more luxurious Jos. A. Bank
Signature collection to the exclusive Jos. A. Bank Signature
Gold collection. The Company purchases the majority of its
merchandise as finished product, with the manufacturer or
supplier responsible for purchasing all components of the
product, including fabric (also known as piece goods or raw
1
materials, although the Company may designate which components
to use). The Company purchases certain of its merchandise
(including almost all suit separates and top coats) on a cut,
make and trim basis, whereby the Company supplies the piece
goods. The Company sources substantially all of its merchandise
from suppliers and manufacturers or through buying agents using
Jos. A. Bank designs and specifications.
The Company operates on a
52-53 week
fiscal year ending on the Saturday closest to January 31.
The following fiscal years ended (or will end) on the following
dates and will be referred to herein by their fiscal year
designations:
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Fiscal year 2004
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January 29, 2005
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Fiscal year 2005
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January 28, 2006
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Fiscal year 2006
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February 3, 2007
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Fiscal year 2007
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February 2, 2008
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Fiscal year 2008
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January 31, 2009
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Fiscal year 2009
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January 30, 2010
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Fiscal year 2010
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January 29, 2011
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Fiscal year 2011
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January 28, 2012
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Each fiscal year noted above consisted (or will consist) of
52 weeks except fiscal year 2006, which consisted of
53 weeks.
Strategy
The Company, established in 1905, has reinvented itself since
1999 by focusing on its Four Pillars of Success,
which consist of:
1. Quality;
2. Service;
3. Inventory In-stock; and
4. Product Innovation.
The Company instills these four factors into all aspects of its
operation and believes they help create a unique specialty
retail environment that develops customer loyalty. Examples of
the Companys commitment to this strategy include:
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continually increasing the already high level of quality of its
products by developing and maintaining stringent design and
manufacturing specifications;
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further developing its multi-channel retailing concept by
opening more stores and enhancing direct selling through the
catalog and Internet operations, thus offering multiple
convenient channels for customers to shop;
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providing outstanding customer service and emphasizing high
levels of inventory fulfillment for its customers;
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expanding its product assortment, including further developing
the Three Levels of Luxury and continuing to add
innovative new products; and
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increasing its product design and development capabilities while
eliminating middlemen in the sourcing of its products.
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The Brand. The Companys branding
emphasizes very high levels of quality in all aspects of its
interactions with customers, including merchandise and service.
The Company has developed very stringent specifications in its
product designs to ensure consistency in the fit and quality of
its products. The merchandise assortment has Three Levels
of Luxury and one unwavering level of quality. The
Three Levels of Luxury range from the original Jos.
A. Bank Executive collection to the more luxurious Jos. A. Bank
2
Signature collection to the exclusive Jos. A. Bank Signature
Gold collection. Examples of the different levels of luxury
include a range of superfine qualities of wool used in suits,
sport coats and slacks, and the uniqueness of tie swatches, some
of which are offered in limited editions.
The Company emphasizes customer service in all aspects of its
business. Sales associates focus on developing close business
relationships with their customers to help serve all of the
customers clothing needs. Inventory availability is a key
focus to ensure customers can purchase merchandise when
requested, whether in the stores or through the Internet or
catalog. A tailor is staffed in most stores to ensure prompt,
high quality alteration service for our customers.
Multi-Channel Retailing. The Companys
strategy is to operate its three sales channels as an integrated
business and to provide the same personalized service to its
customers regardless of whether merchandise is purchased through
its stores, the Internet or catalog. The Company believes the
synergy between its stores, its Internet site and its catalog
offers an important convenience to its customers and a
competitive advantage to the Company. The Company leverages its
three sales channels by promoting these channels together to
create brand awareness. For example, the Internet site can be
used by our sales associates to increase the product available
to store customers, provides store location listings and can be
used as a promotional source for the stores and catalog. The
Company also uses its catalog to communicate the Jos. A. Bank
image, to provide customers with fashion guidance in
coordinating outfits and to generate store and Internet traffic.
As a customer convenience, customers may purchase, return or
exchange in a store all products that are offered in the catalog
and through the Internet.
Store Growth. The Company had 506 stores as of
fiscal year-end 2010, which included 480 Company-owned Full-line
stores (as defined below under Segments), 12
Company-owned Outlet and Factory stores and 14 stores operated
by franchisees. As a result of implementing its store growth
plan, the Company opened 60 new stores in fiscal year 2004, 56
new stores in fiscal year 2005, 52 new stores in fiscal year
2006, 48 new stores in fiscal year 2007, 40 new stores in fiscal
year 2008, 14 new stores in fiscal year 2009 and 36 new stores
(including 30 Full-line stores, 5 Factory stores and 1 Franchise
store) in fiscal year 2010. The Company intends to open new
stores primarily in core markets which may allow the Company to
leverage its existing advertising, management, distribution and
sourcing infrastructure. The Company also intends to continue to
open new stores in less mature markets such as western states,
where it is developing a critical mass of stores to gain
leverage.
The Company plans to open approximately 40 to 50 stores in
fiscal year 2011. In the future, the Company believes that it
can grow the chain to approximately 600 Full-line stores and 50
to 75 Factory stores in the United States, depending on the
performance of the Company over the next several years and the
development of the Factory store concept, among other factors.
Product Design and Sourcing. The Company
designs and sets the specifications for substantially all of its
products. The designs are provided to a world-wide vendor base
which manufactures to the Companys specifications. In
certain cases, the Company has eliminated the middlemen (e.g.
importers and resellers) in its sourcing process and contracts
directly with its manufacturers. The Company used a buying agent
through which it sourced approximately 51% of its total product
purchases in fiscal year 2010 and expects to continue this
relationship in fiscal year 2011. The Companys product
design and sourcing strategies have resulted in reduced product
costs over the past ten years, which have enabled the Company to
design additional quality into its products, increase gross
profit margins over that period and fund the development of the
infrastructure needed to grow the chain.
Segments
The Company has two reportable segments: Stores and Direct
Marketing. The Stores segment consists of all Company-owned
stores excluding Outlet and Factory stores (Full-line
stores). The Direct Marketing segment consists of our
Internet and catalog operations. The Company has included
information with regard to these segments for each of its last
three fiscal years in Note 12 to its Consolidated Financial
Statements.
3
Stores. The Companys Stores segment
consists of its 480 Full-line stores. The Company opened
30 Full-line stores (and closed three stores) in fiscal
year 2010 and plans to open approximately 35 to 40 Full-line
stores and to close one or more Full-line stores in fiscal year
2011. The Companys real estate strategy focuses primarily
on stores located in high-end, specialty retail centers with the
proper co-tenancy that attract customers with demographics that
are similar to the Companys target customer. These
specialty centers include, but are not limited to, outdoor
lifestyle centers, malls and downtown/street front/business
districts. As of fiscal year-end 2010, the store mix of the 480
Full-line stores consisted of 167 outdoor lifestyle centers, 81
malls, 55 downtown/street front/business districts and 177 strip
centers, power centers or freestanding stores.
The Companys current store prototype was introduced in
March 2001 in Charlottesville, Virginia and has been continually
improved. The design emphasizes an open shopping experience that
coordinates the Companys successful corporate casual and
sportswear with its suits, shirts, ties and other products. The
store design is based on the use of wooden fixtures, numerous
tables to feature fashion merchandise, carpet and abundant
accent lighting and is intended to promote a pleasant and
comfortable shopping environment. Approximately 80% of the space
in stores that were opened in the last three fiscal years is
dedicated to selling activities, with the remainder allocated to
stockroom, tailoring and other support areas. The Full-line
stores averaged approximately 4,640 square feet at fiscal
year-end 2010. The Full-line stores opened in fiscal years 2009
and 2010 averaged approximately 4,040 and 4,200 square
feet, respectively.
The cost to open a new store is based primarily on store size
and landlord construction allowances. In fiscal year 2010, the
average build-out cost for a new Full-line store was
approximately $435,000, including leasehold improvements,
fixtures,
point-of-sale
equipment and tailor shop equipment. The Company expects to be
reimbursed by landlords an average of approximately $125,000 of
the new store build-out cost for these Full-line stores opened
in fiscal year 2010. New stores also require an inventory
investment, which varies based on the season in which the store
opens. Although amounts vary, in fiscal year 2010, new Full-line
store openings required an average initial investment of
approximately $285,000. The inventory levels in a new store are
typically increased as the stores sales grow.
Substantially all Full-line stores have a tailor shop, which
provides a range of tailoring services as a convenience to
customers. The stores are designed to utilize Company-owned
regional tailor shops which allow the use of smaller tailor
shops within each store. These regional facilities receive
customers goods from Full-line stores, which are altered
and returned to the selling store for customer pickup. In
addition, the store managers and certain additional store staff
have been trained to fit tailored clothing for alterations. The
Company guarantees all of the tailoring work performed.
The Company launched a tuxedo rental initiative in January 2010
on a test basis in approximately 5% of its Full-line stores and
rolled out the tuxedo rental business to substantially all of
the stores by the end of the second quarter of fiscal year 2010.
The Company has contracted with a national distributor that owns
the tuxedo inventory and delivers the orders to the
Companys stores.
4
At January 29, 2011, the Company had 506 retail stores
(consisting of 480 Full-line stores, 12 Outlet and Factory
stores and 14 Franchise stores) in 42 states and the
District of Columbia. The following table sets forth the stores
that were open at that date.
JOS. A.
BANK STORES
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Total #
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State
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of Stores
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Alabama(a)(b)
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13
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Arizona
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5
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Arkansas
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4
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California
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31
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Colorado
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9
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Connecticut
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14
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Delaware
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1
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Florida
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35
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Georgia(a)(b)
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22
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Idaho
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1
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Illinois(a)
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29
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Indiana
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9
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Iowa
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3
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Kansas
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3
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Kentucky
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5
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Louisiana(a)
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6
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Maryland(b)
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21
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Massachusetts
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16
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Michigan
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13
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Minnesota
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7
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Mississippi(a)
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3
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Missouri
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8
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Nebraska
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2
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Nevada
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3
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New Hampshire
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2
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New Jersey(b)
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29
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New Mexico
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1
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New York(b)
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21
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North Carolina(a)
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21
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Ohio
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22
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Oklahoma
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4
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Pennsylvania(b)
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27
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Rhode Island
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2
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South Carolina(a)
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11
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South Dakota
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1
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Tennessee(a)
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12
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Texas(b)
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48
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Utah
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2
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Virginia(b)
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25
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Washington
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3
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Washington, D.C.
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5
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West Virginia
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1
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Wisconsin
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6
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Total
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506
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(a) |
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Includes one or more Franchise store(s) |
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(b) |
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Includes one or more Outlet or Factory store(s) |
Direct Marketing. The Companys Direct
Marketing segment, consisting of its Internet and catalog
channels, is a key part of the Companys multi-channel
concept. This segment is driven primarily by the Internet
channel as the catalog channel has declined over time with the
increasing popularity of the Internet. In fiscal year 2010, the
Direct Marketing segment accounted for approximately 10% of the
Companys net sales and recorded a sales increase of 24.4%.
The Companys Direct Marketing segment offers potential and
existing customers convenience in ordering the Companys
merchandise. In fiscal years 2009 and 2010, the Company
distributed approximately 9.2 million and 9.6 million
catalogs, respectively.
The Internet site and the catalog offer potential and existing
customers an easy way to order the full range of Jos. A. Bank
products. They are significant resources used to communicate the
Companys high-quality image, provide customers with
guidance in coordinating outfits, generate store traffic and
provide useful market data on customers. The Company believes
customers are very confident purchasing traditional business
attire through our Internet site and catalog, as suits
represented approximately 25% of sales in the Direct Marketing
segment in fiscal year 2010.
5
To make catalog and online shopping as convenient as possible,
the Company maintains a toll-free telephone number accessible
24 hours a day, seven days a week. Catalog sales associates
can help customers select merchandise and can provide detailed
information regarding size, color, fit and other merchandise
features. In some cases, sample merchandise is available for
catalog sales associates to view, thereby allowing them to
better assist customers. Merchandise purchased from the catalog
or online may be returned to the Company through any of its
stores or by mail.
The Company upgraded its existing Internet infrastructure during
fiscal year 2009 to meet increasing capacity needs and to add
certain features to further enhance the customer shopping
experience. The new Internet site, which was launched in October
2009, has many customer-friendly features such as larger images,
product photos with zoom-in functionality that allows fine
details to be seen, plus advanced product search functionality,
such as searching by size, that makes shopping more efficient.
In addition, the site accepts new forms of payment such as
Paypal and Bill Me Later. Customers may request to have their
orders shipped to an address of their choice or to any JoS. A.
Bank store for convenient pick up. The new site also supports
many of the creative promotional and sale events that were
previously offered only in the Companys Full-line stores.
The site has enabled the Company to be responsive to trends
thereby affording the Company an opportunity to increase sales.
During fiscal year 2010, the Company launched a new website
dedicated exclusively to the products offered under its Big and
Tall customer category. As part of this new website, the Company
expanded its product offerings to add or broaden such items as
suits and suit separates including portly sizes, dress shirts,
extra long ties and sportshirts. The Company expects to continue
to expand the Big and Tall product assortment in fiscal year
2011. Also, during fiscal year 2010, the Company launched a new
website dedicated to the products offered under its new Factory
store concept. In addition to expanding the Companys
overall product offerings over the Internet channel, these new
websites further leverage the
e-commerce
platform the Company developed and implemented in fiscal year
2009.
The Company has experienced strong growth in its Internet sales
over the past five fiscal years. To help drive Internet traffic,
the Company affiliates with other Internet companies. These
affiliates link potential customers from their web platforms to
the Companys websites where the customer may ultimately
make a purchase. The Company typically pays a fee to these
affiliates based on a percentage of net sales generated by them.
As a result of an analysis performed by the Company in fiscal
year 2010, the Company eliminated approximately one-third of its
under-performing affiliates and reduced its total number of
affiliates from approximately 3,100 at the end of fiscal year
2009 to approximately 2,100 at the end of fiscal year 2010.
Despite this decrease, Internet sales significantly increased
during fiscal year 2010. The Company expects to continue to
pursue affiliate arrangements to help fuel future Internet sales
increases.
To process catalog orders, sales associates enter orders online
into a computerized catalog order entry system, while Internet
orders are placed by the customer and are linked to the same
order entry system. After an order is placed, it updates files
and permits the Company to measure the response to individual
catalog mailings and Internet email promotions. Computer
processing of orders is performed by the warehouse management
system which permits orderly picking of inventory from the
warehouses. The Companys order entry and fulfillment
systems permit the shipment of most orders no later than the day
after the order is placed (assuming the merchandise is in
stock). Orders are shipped primarily by ground delivery to
arrive at a customers home in two to five business days
or, if requested, by expedited delivery services, typically
using United Parcel Service as the delivery company. Sales and
inventory information is available to the Companys
merchants the day after the sales transaction.
Corporate and Other. In addition to the
corporate office and the distribution centers, the
Companys Corporate and Other segment consists
of 14 Franchise locations and 12 Outlet and Factory stores.
Generally, a franchise agreement between the Company and the
franchisee provides for a ten-year term with an option,
exercisable by the franchisee under certain circumstances, to
extend the term for an additional ten-year period. Franchisees
pay the Company an initial fixed franchise fee and then a
percentage of its net sales. Franchisees are required to
maintain and protect the Companys reputation for high
quality, classic clothing and customer service. Generally, the
franchisees have the rights within certain geographical
territories to operate stores,
6
which prohibits the Company from opening stores within these
territories without first giving the franchisees the right of
first refusal. The Company opened 1 new Franchise store in
fiscal year 2010 and does not expect to open a significant
number of Franchise stores in the future. Franchisees purchase
substantially all merchandise offered for sale in their stores
from the Company at an amount above the Companys cost.
Prior to fiscal year 2010, the Company had 7 Outlet stores which
served to liquidate excess merchandise and offer certain first
quality products at a reduced price. During fiscal year 2010,
the Company launched a new Factory store concept initiative to
target a unique customer base that it believes has limited
overlap with the customer base in our Full-line stores. The
Company opened 5 stores under the new Factory store concept in
fiscal year 2010 to test the initiative. New merchandise
offerings were developed that cater to this customers
needs. Additionally certain of these product offerings were also
introduced into the pre-2010 Outlet stores. The results achieved
by the 5 stores opened in fiscal year 2010 met the
Companys expectations, and as a result, the Company plans
to open an additional 10 to 12 Factory stores in fiscal year
2011. Also, the Company expects, over time, to convert the 7
pre-2010 Outlet stores to Factory stores. If the stores
opened/operated under this new initiative continue to perform to
the Companys expectations, it believes there is a
long-term opportunity to operate 50 to 75 Factory stores in the
U.S.
Merchandising
The Company believes it fills a niche of providing upscale
classic, professional mens clothing with superior quality
at a reasonable price. The Companys merchandising strategy
focuses on achieving an updated classic look with extreme
attention to detail in quality materials and workmanship. The
Company offers a distinctive collection of clothing and
accessories necessary to dress the career man from head to toe,
including formal, business and business casual, as well as
sportswear and golf apparel, substantially all of which is sold
under the Jos. A. Bank label. Its product offerings include
tuxedos, suits, shirts, vests, ties, sportcoats, pants,
sportswear, overcoats, sweaters, belts and braces, socks and
underwear, among other items. The Company also sells branded
shoes from several vendors, representing approximately 3% of
total net sales, which are substantially the only products it
sells not using the Jos. A. Bank brand.
The Companys branding emphasizes very high levels of
quality in all aspects of its interactions with customers,
including merchandise and service. The Company has developed
very stringent specifications in its product designs to ensure
consistency in the fit and quality of the product. The
merchandise assortment has Three Levels of Luxury
and one unwavering level of quality. The Three Levels of
Luxury range from the Companys original Jos. A. Bank
Executive collection, to the more luxurious Jos. A. Bank
Signature collection to the exclusive Jos. A. Bank Signature
Gold collection. An example of the different levels of luxury
includes a range of superfine qualities of wool used in suits,
sport coats and slacks.
The Company believes its merchandise offering is well positioned
to meet the changing trends of business dress for its target
customers. Suits accounted for approximately 30% of the
Companys merchandise sales in fiscal year 2010, and serve
as the foundation of the Companys extensive offering of
other products. As the corporate work environment trended to
casual over the past decade, the Companys product
offerings were modified to meet the needs of the Jos. A. Bank
customer.
The Company has many unique products to serve its
customers needs and believes that continued development of
innovative products is one of its Four Pillars of
Success. For example, the Company offers its Separates
collection, a concept for purchasing suits that allows customers
to customize their suits by selecting separate, but perfectly
matched, jackets and pants from one of three coat styles, plain
front or pleated pants, and numerous updated fabric choices
including superfine wool and natural stretch wool. The Separates
line allows a customer to buy a suit that will fit his unique
body size with minimum alterations, for a custom fit. Jos. A.
Bank is one of the few retailers in the country that has
successfully developed this concept in better quality suits,
which the Company believes is a competitive advantage.
The Company also has a very successful line of wrinkle
resistant, all cotton dress shirts and sportshirts and in fiscal
year 2007 introduced the slimmer cut Tailored Fit
model to its dress shirt offering. The Company offers its
Vacation-in-Paradise
(VIP) line of casual vacation wear and its David
Leadbetter golf apparel, which includes sportshirts, sweaters
and casual trousers, in its sportswear category.
7
In fiscal year 2004, the Company introduced a wrinkle resistant,
stain resistant traveler cotton pique polo shirt and machine
washable traveler wool pants, as part of its successful
Traveler collection of products. In late fiscal year
2004, it introduced a wrinkle resistant, stain-resistant suit as
part of its Separates Collection. The Traveler Suit Separates
program is designed to take advantage of our expertise in suit
separates with perfectly matched suit coats and pants sold in
the customers size for a better fit. The 100% wool
Traveler Suit Separates are stain resistant and made with
stretch comfort waist bands and stretch linings and include
extra interior pockets. In fiscal year 2007, the Company also
added a selection of wrinkle and stain resistant cashmere
sweaters to its line of Traveler products. During fiscal year
2010, the Company further expanded its Traveler collection with
the introduction of a Tailored Fit suit product which offers
customers a narrower, more stylish fit.
In fiscal year 2005, the Company introduced the Stays
Cool suit, which features innovative fabrics and linings
using a variety of technologies to keep the customer cool and
comfortable in a warm climate. The Company has continued to add
products using the Stays Cool features during the
past several years.
In fiscal year 2010, the Company introduced the
Classic collection, a line of products developed
exclusively for its new Factory stores. This line of products
emphasizes traditional, classic styling at a superior value to
the Factory store customer.
Also in fiscal year 2010, with the launch of its new Big and
Tall website, the Company further expanded its Big and Tall
product offerings to add or broaden such items as suits and suit
separates including portly sizes, dress shirts, extra long ties
and sportshirts. Prior to fiscal year 2010, the Company had
certain limited Big and Tall product offerings which included
dress shirts and tailored clothing such as suits and suit
separates, sportcoats, dress pants and formalwear.
Because of the classic character of the Companys
merchandise and aggressive store clearance promotions,
historically, the Company has been able to sell substantially
all of its products through its Full-line stores, catalog,
Internet site and Outlet and Factory stores and has not been
required to sell significant amounts of inventory to third-party
liquidators.
Design
and Purchasing
Jos. A. Bank merchandise is designed through the coordinated
efforts of the Companys merchandising and planning staffs,
working in conjunction with suppliers, manufacturers and buying
agents around the world. The process of creating a new garment
begins up to 18 months before the products expected
in-stock date. Substantially all products are made to the
Companys rigorous specifications, thus ensuring consistent
fit and feel for the customer. The merchandising staff oversees
the development of each products style, color and
fabrication. The Companys planning staff is responsible
for providing each channel of business with the correct amount
of products.
The Company believes that it gains an advantage over many of its
competitors in terms of quality and price by designing its
tailored and other products, selecting and, in certain cases,
purchasing raw materials (finished wool fabric) and then having
merchandise manufactured to its own specifications by third
party contract manufacturers. Since the Companys designs
are focused on updated classic clothing, the Company believes it
experiences much less fashion risk than other retailers that
offer fashions that change more frequently. Substantially all
products manufactured must conform to the Companys
rigorous specifications with respect to standardized sizing and
quality.
Approximately 3% of the total product purchases (including piece
goods) in fiscal year 2010 were sourced from United States
suppliers, and approximately 97% were sourced from suppliers in
other countries. In fiscal year 2010, approximately 37% of the
total product purchases were from suppliers in China (including
Hong Kong), 24% in Mexico, 9% in Bangladesh, 7% in Sri Lanka and
7% in India. Of the remaining 13% of total purchases, no other
country represented more than 5% of total product purchases in
fiscal year 2010. These percentages reflect the countries where
the suppliers are primarily operating or manufacturing, which
may not always be where the suppliers are actually domiciled.
8
The Company uses a buying agent to source a significant portion
of its products from various companies that are located in or
near Asia (China, including Hong Kong, Indonesia, India,
Malaysia, Thailand, and Bangladesh). Purchases through this
buying agent represented approximately 51% of the total product
purchases in fiscal year 2010. The Company also makes other
purchases from manufacturers and suppliers in Asia. Two other
suppliers combined represented approximately 19% of total
product purchases in fiscal year 2010. The Company buys its
shirts from leading U.S. and overseas shirt manufacturers
who also supply shirts to many of the Companys competitors.
The total product purchases discussed above include direct
purchases of raw materials by the Company that are subsequently
sent to manufacturers for cutting and sewing. The Company
purchases the raw materials for approximately 9% of its finished
products, of which five vendors accounted for over 72% of the
raw materials purchased directly by the Company in fiscal year
2010. The remainder of its finished products are purchased as
finished units, with the vendor responsible for the acquisition
of the raw materials based on the Companys specifications.
The Company transacts substantially all of its business on an
order-by-order
basis and does not maintain any long-term or exclusive
contracts, commitments or arrangements to purchase from any
finished goods supplier, piece goods vendor or contract
manufacturer. The Company ordinarily places orders for the
purchase of inventory approximately 6 to 12 months in
advance.
The Company has not experienced any significant difficulties as
a result of any foreign political, economic or social
instabilities. The Company believes that it has good
relationships with its piece goods vendors, finished goods
suppliers, contract manufacturers and buying agents and that
there will be adequate sources to produce a sufficient supply of
quality goods in a timely manner and on satisfactory economic
terms, but it cannot make any assurances of such results. The
Company does business with all of its vendors in
U.S. currency. As a result, the Company is affected by the
value of the U.S. dollar against the foreign currencies of
its suppliers countries. The Company attempts to mitigate
these risks through aggressive price negotiation and resourcing.
A devaluation of the U.S. dollar against these currencies
may impact the Companys results as an increase in the cost
of goods sold.
Marketing,
Advertising and Promotion
Strategy. The Company has historically used
mass media advertising (such as local radio, national cable
television and direct mail marketing) and promotional activities
in support of its store and catalog/Internet operations. The
Company also sends email promotions to its store and Internet
customers. The basis of each marketing campaign, while primarily
promotional, is the identification of the Jos. A. Bank name as
synonymous with high quality, upscale, classic clothing offered
at a value. The Company maintains a database of names of people
who have previously made a purchase from one of the
Companys retail stores, its Internet site or catalog or
have requested a catalog or other information from the Company.
During fiscal year 2010, the Company completed a conversion of
its customer database to an updated platform, retaining customer
history only for the past four years. Upon this conversion, the
Company maintained over 4.6 million names in this customer
database as of fiscal year-end 2010. Of these names,
approximately 3.2 million represent individuals who have
made such purchases or information requests in the past
24 months, an increase over the 2.6 million of such
customers as of fiscal year-end 2009. The Company evaluates its
database for its mailings and selects names based on
expectations of response to specific promotions, which allows
the Company to efficiently use its marketing dollars.
In the fourth quarter of fiscal year 2004, the Company began
testing national cable television advertising as a method to
increase its brand awareness and to drive customers to its
stores. The Company has increasingly expanded its use of
television advertising in the past six years and expects to
continue marketing through television advertising in fiscal year
2011.
The Company employs a high-low product pricing
strategy and runs targeted promotional events throughout the
year based on market conditions and customer preferences and
demands. As part of the high-low strategy, the
Company promotes specific items or categories at prices that are
below the retail price
9
regularly offered to customers. The Company also conducts
clearance sales throughout the year, especially at the end of
each of its two seasons, primarily to manage its seasonal
inventory levels.
Corporate Card Program. Certain organizations
and companies can participate in our corporate card program,
through which all of their employees are eligible to receive a
20% discount off regularly-priced Jos. A. Bank merchandise and
for whom we develop specific marketing events throughout the
year. The card is honored at all Full-line stores, as well as
for catalog and Internet purchases. At year-end fiscal 2010,
over 439,000 companies nationally, from small
privately-owned companies to large public companies, were
members of the program, representing an increase of
approximately 14% over the approximately 385,000 member
companies at year-end fiscal 2009. Participating companies are
able to promote the card as a free benefit to their employees.
As the number of participants in the corporate card program has
increased significantly in the past several years, sales to
these customers have become a substantial portion of total sales.
Apparel Incentive Program. Jos. A. Bank
Clothiers apparel incentive gift certificates are used by
various companies as a reward for employee achievement or for
employee recognition. The Company also redeems proprietary gift
certificates and gift cards marketed by major premium/incentive
companies.
Distribution
The Company uses a centralized distribution system, under which
all merchandise is received, processed and distributed through
two distribution facilities located in Hampstead, Maryland (one
owned and one leased). The facilities are designed to handle
different product types, with the owned building handling
flat goods such as shirts, sweaters, ties, etc and
the leased building handling primarily hanging goods
such as suits, dress pants, coats, etc. Both buildings are
designed to support corporate office functions as well as
distribution center functions and are adjacent to each other.
A portion of the merchandise received at the distribution
centers is inspected to ensure expected quality in workmanship
and conformity to Company specifications. The merchandise is
then allocated to individual stores or to warehouse stock (to
support the Direct Marketing segment and to replenish store
inventory as merchandise is sold). Merchandise allocated to
stores is then packed for delivery and shipped, principally by
common carrier. Each store generally receives a shipment of
merchandise one to five times a week from the distribution
centers, depending on a stores size or sales volume and
the time of the year. Inventory of basic merchandise in stores
is replenished regularly based on sales tracked through
point-of-sale
terminals. Shipments to customers purchasing through the Direct
Marketing segment are also made from the central distribution
facilities and, less frequently, from stores.
To support new store growth, the Company has upgraded its
distribution centers several times over the past ten years. In
late fiscal year 2004, the Company increased its distribution
center capacity by leasing and equipping approximately
289,000 square feet of space in a facility that is adjacent
to the Companys headquarters and original distribution
center. This second distribution center became fully operational
in early fiscal year 2005. With this fiscal year 2005 expansion,
the distribution center facilities were designed to support
approximately 500 stores plus the Direct Marketing segments. To
accommodate our latest plans to expand the store base to
approximately 650 to 675 total stores, we added another
126,000 square feet in the second distribution center in
fiscal year 2010, of which 114,000 square feet was
dedicated to distribution and 12,000 square feet was
dedicated to office space. This expansion in fiscal year 2010
should be sufficient to support most of our expected capacity
needs for hanging products. To support our capacity needs for
flat products, we will add additional space in fiscal years 2011
and/or 2012
through either lease or acquisition.
Management
Information Systems
In fiscal year 1998, the Company installed and implemented the
then-current version of its merchandising, warehouse, sales
audit, accounts payable and general ledger system. While several
newer updates of this system have been released by the software
vendor but not installed by the Company, the system meets the
Companys current business needs. In fiscal year 1999, the
Company replaced its
point-of-sale
(POS) system and upgraded this system in fiscal
years 2005 and 2007. In fiscal year 2007, the Company added a
wide-area network to its POS system, which, among other
functionality, enables electronic orders to be placed from the
10
stores by a sales associate to the Companys centralized
fulfillment center. In fiscal year 2007, the Company implemented
a new financial reporting system. In fiscal year 2000, the
Company upgraded its catalog order processing system to the
then-current version, which was again updated in fiscal year
2007. During fiscal year 2009, the Company upgraded its existing
Internet infrastructure in order to meet the increasing capacity
needs and to add certain features to further enhance the
customer shopping experience.
In fiscal year 2007, the Company implemented a new system that
increased its ability to communicate design specifications to
its worldwide vendor base, which replaced a system installed in
fiscal year 2003. In fiscal year 2004, the Company developed
systems that allow increased management and reporting of pricing
elements such as gross margins. The Company outsources to a
third party the storage and maintenance of its customer
relationships management (CRM) database. The Company
can access the CRM database which it uses to select names for
customer promotions. By using these systems, the Company is able
to capture greater customer data and increase its marketing
efficiency using such data. The Company upgraded its proprietary
customer database systems in fiscal year 2010 with a new
outsourced vendor, which should enable the Company to enhance
the productivity of its customer database.
In fiscal year 2010, the Company expanded its Internet platform
to include two additional
e-sites:
Factory and Big and Tall. The Factory site allows customers to
buy Factory goods online, whereas the Big and Tall site allows
customers to buy extended-size goods online.
Competition
The Company competes primarily with other specialty retailers of
mens apparel, department stores and other catalog and
online merchants engaged in the retail sale of mens
apparel, and to a lesser degree with other retailers of
mens apparel. The Company is one of only a few national
multi-channel retailers focusing exclusively on mens
apparel, which the Company believes provides a competitive edge.
The Company believes that it maintains its competitive position
based not only on its ability to offer its high quality career
clothing at reasonable prices, but also on its broad selection
of in-stock merchandise, friendly customer service and product
innovation as part of its Four Pillars of Success.
The Company competes primarily with specialty and discount store
chains, independent retailers, national and local department
stores, Internet retailers and other catalogers engaged in the
retail sale of mens apparel, and to a lesser degree with
other apparel retailers. These competitors, include, among
others, Brooks Brothers, Macys, Lands End, Mens
Wearhouse and Nordstrom, as well as local and regional
competitors in each stores market. Many of these
competitors are considerably larger and have substantially
greater financial, marketing and other resources than the
Company.
Trademarks
The Company is the owner or exclusive licensee in the United
States of the marks JOS. A.
BANK®,
JOS. A. BANK
V.I.P.®,
JOS. A. BANK VACATION IN
PARADISE®,
VACATION IN
PARADISE®,
THE MIRACLE
COLLECTION®
and TRAVELER
CREASE®
(collectively, the Jos. A. Bank Marks). These
trademarks are registered in the United States Patent and
Trademark Office. A Federal registration is renewable
indefinitely if the trademark is still in use at the time of
renewal. The Companys rights in the Jos. A. Bank Marks are
a material part of the Companys business. Accordingly, the
Company intends to maintain its use of the Jos. A. Bank Marks.
The Company is not aware of any claims of infringement or other
material challenges to the Companys right to use the Jos.
A. Bank Marks in the United States. An application has been
filed by a third party for registration in China of the
trademark Jos. A. Bank. The Company has filed an
opposition to the application.
In addition, the Company has registered josbank.com
and various other Internet domain names. The Company intends to
renew its registration of domain names from time to time for the
conduct and protection of its
e-commerce
business.
11
Seasonality
The Companys net sales, net income and inventory levels
fluctuate on a seasonal basis and therefore the results for one
quarter are not necessarily indicative of the results that may
be achieved for a full fiscal year. The increased customer
traffic during the holiday season and the Companys
increased marketing efforts during this peak selling time have
resulted in sales and profits generated during the fourth
quarter becoming a larger portion of annual sales and profits as
compared to the other three quarters. Seasonality is also
impacted by growth as more new stores have historically been
opened in the second half of the year. During the fourth
quarters of fiscal years 2008, 2009 and 2010, the Company
generated approximately 36%, 36% and 37%, respectively, of its
annual net sales and approximately 52%, 50% and 48%,
respectively, of its annual net income.
Employees
As of March 23, 2011, the Company had approximately
4,998 employees, consisting of 3,728 full-time
employees and 1,270 part-time employees. Approximately 320
of our employees work in the Hampstead, Maryland tailoring
overflow shop and distribution centers, most of whom are
represented by the Mid-Atlantic Regional Joint Board, Local 806.
The stated term of our collective bargaining agreement with the
Mid-Atlantic Regional Joint Board, Local 806 expires on
February 28, 2012.
Approximately 90 of our sales associates in New York City and
four surrounding New York counties are represented by Local 340,
New York New Jersey Regional Joint Board, Workers United. Our
most recent collective bargaining agreement covering these
employees ends on April 30, 2013.
As there have been no work stoppages in more than 20 years,
the Company believes that relations are good with both of the
unions that represent segments of its employees. The Company
also believes that its relations with its non-union employees
are good.
Available
Information
The Companys principal executive offices are located at
500 Hanover Pike, Hampstead, Maryland 21074. The Companys
telephone number is
(410) 239-2700
and its website address is www.josbank.com. The Company makes
its annual reports on
Form 10-K,
quarterly reports on
Form 10-Q,
current reports on
Form 8-K,
and amendments to these reports available on its website free of
charge as soon as practicable after they are filed with, or
furnished to, the Securities and Exchange Commission
(SEC). In addition, the public may read and copy any
materials filed or furnished by the Company with the SEC at the
SECs public reference room at 100 F Street,
N.E., Washington D.C. 20549. The public may obtain information
on the operation of the Public Reference Room by calling the SEC
at
1-800-SEC-0330.
Also, the SEC maintains an Internet site (www.sec.gov) that
contains reports, proxy and information statements and other
information regarding issuers that file electronically.
You should consider carefully the risks described below,
together with the other information contained in this report. If
any of the identified risks actually occurs, or is adversely
resolved, the Companys consolidated financial statements
could be materially, adversely impacted in a particular fiscal
quarter or year and the Companys business, financial
condition and results of operations may suffer materially. As a
result, the market price of the Companys common stock
could decline and you could lose all or part of your investment
in the stock of the Company. The risks described below are not
the only risks facing the Company. Additional risks and
uncertainties, including those not currently known to the
Company or that the Company currently deems to be immaterial
also could materially adversely affect the Companys
business, financial condition and results of operations.
12
If we
are not able to continue profitably opening new stores due to
general economic conditions or otherwise, our growth may be
adversely affected.
A significant portion of our growth has resulted and is expected
to continue to result from the opening of new stores. The
deterioration in the U.S. economic environment, the
disruption and significant tightening in the U.S. credit
and lending markets and reduced consumer spending, among other
things, can slow the development of new shopping malls and
retail centers which can restrict the Companys ability to
find suitable locations for new stores. The Company believes
that quality real estate opportunities are available in the
marketplace, but such economic troubles could lead to
adjustments to our expansion program in fiscal year 2011 and
beyond. While we believe that we will continue to be able to
obtain suitable locations for new stores, negotiate acceptable
lease terms, hire qualified personnel and open and operate new
stores on a timely and profitable basis, we cannot assure you
that we will be able to meet these objectives. As we continue
our expansion program, the proposed expansion will place
increased demands on our operational, managerial and
administrative resources. These increased demands could cause us
to operate our business less effectively, which in turn could
cause deterioration in our financial performance. The opening of
new stores may adversely affect Direct Marketing sales and
profits. In addition, the opening of new stores in existing
markets may adversely affect sales and profits of established
stores in those markets.
The results achieved by our existing stores may not be
indicative of longer term performance or the potential market
acceptance of stores in other locations. We cannot assure you
that any new store that we open will have similar operating
results to those of prior stores. New stores commonly take up to
five years to reach desired operating levels due to development
typically associated with new stores such as growing the
customer base, increasing brand awareness and the development of
the stores sales team. The failure of the existing or the
new stores to perform as predicted could negatively impact our
business, financial condition and results of operations.
We expect to fund our expansion through use of existing cash,
short-term investments and cash flows from operations. However,
if we experience limitations on our ability to utilize these
sources of liquidity, our performance declines or other factors
so dictate, we may slow or discontinue store openings. If we
fail to successfully implement our expansion program, our
business, financial condition and results of operations could be
materially adversely affected.
We
face significant competition and may not be able to maintain or
improve our competitive position or profitability.
The retail apparel business is highly competitive and we expect
it to remain so. We compete primarily with specialty and
discount store chains, independent retailers, national and local
department stores, Internet retailers and other catalogers
engaged in the retail sale of mens apparel, and to a
lesser degree with other apparel retailers. Many of these
competitors are much larger than we are and have significantly
greater financial, marketing and other resources than we have.
In many cases, our primary competitors sell their products in
stores that are located in the same shopping malls or retail
centers as our stores. In order to better compete, we may need
to increase the number of promotional sales, which could reduce
our margins and affect our profitability. Moreover, in addition
to competing for sales, we compete for favorable site locations
and lease terms in shopping malls and retail centers. We believe
that our emphasis on classic styles make our business less
vulnerable to changes in merchandise trends than many apparel
retailers; however, our sales and profitability depend upon the
continued demand for our classic styles. We face a variety of
competitive challenges including:
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anticipating and quickly responding to changing consumer demands;
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maintaining favorable brand recognition and effectively
marketing our products to consumers in several diverse market
segments;
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developing innovative, high-quality new products
and/or
product/brand extensions in sizes, colors and styles that appeal
to consumers of varying age groups and tastes;
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competitively pricing our products and achieving value for our
customers; and
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providing strong and effective marketing support.
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13
Increased competition or our failure to meet these competitive
challenges could result in price reductions, increased marketing
expenditures and loss of market share, any of which could have a
material adverse effect on our business, financial condition and
results of operations.
Our
business is tied to consumer spending for discretionary items
and negative changes to consumer confidence and other
recessionary pressures brought on by, among other things,
general economic conditions, could have an adverse affect on our
business.
Our business is sensitive to a number of factors that influence
the levels of consumer spending, including political and
economic conditions, consumer confidence and the levels of
disposable consumer income which is impacted by consumer debt,
interest rates, unemployment levels, changes in financial
markets, reductions in net worth, residential real estate
values, tight credit markets, taxation, gasoline and energy
costs, among other factors. Consumer confidence also may be
adversely affected by national and international security
concerns such as war, terrorism or the threat of war or
terrorism. In addition, because apparel and accessories
generally are discretionary purchases, declines in consumer
spending patterns may impact us more negatively as a specialty
retailer and could have a material adverse effect on our
business, financial condition and results of operations.
Ongoing economic problems in the United States have resulted in
a high unemployment rate, lower consumer confidence, shortages
of consumer credit, recessionary pressures and overall slowing
in the growth in the retail sector which may continue to be
negatively affected for the foreseeable future. Consumer
spending for higher value discretionary items generally declines
faster than for other retail purchases during recessionary
periods and other periods where disposable income is adversely
affected. We cannot assure you that government responses to the
disruptions in the financial markets or any stimulus plans will
have a positive impact on the current economic situation. If the
current unfavorable economic conditions continue, consumer
purchases of our merchandise could be adversely affected, which
could have a material adverse effect on our business, financial
condition and results of operations.
Tight
credit markets may have a negative effect on our
business.
Distress in the financial markets, such as the distress
experienced by the United States economy since late fiscal year
2008, may result in diminished liquidity and credit
availability, and there can be no assurance that our liquidity
will not be affected by changes in the financial markets and the
global economy. In fiscal year 2010, we elected not to renew our
credit facility and a tightening of the credit markets could
make it more difficult for us to access funds through new credit
facilities or through the issuance of the Companys
securities.
Our immediate cash requirements, which fluctuate daily, are
deposited at financial institutions and exceed federally insured
limits. If the financial environment causes these financial
institutions to become unstable or fail, we may experience
losses on these deposit accounts.
Our
cash investment strategies may have a negative effect on our
business.
At present, we invest most of our cash in money market accounts
and overnight federally-sponsored agency notes and
U.S. Treasury bills with original maturities of
90 days or less. Our short-term investments consist
primarily of U.S. Treasury bills with maturities of less
than one year. The returns on these investments effectively
reflect current market interest rates. As a result, market
interest rate changes may negatively impact our net interest
income or expense. We may invest in other types of securities
such as municipal or corporate debt instruments or other types
of potentially higher yielding securities, the value of which
could be negatively impacted by changing liquidity conditions,
credit rating downgrades, changes in market interest rates or a
deterioration of the underlying entities financial
condition, among other factors. As a result, the value or
liquidity of our cash/investments could decline and result in a
material impairment, which could have a material adverse effect
on our financial condition and operating results.
14
Our
success is dependent on our key personnel and our ability to
attract and retain key personnel.
We believe that we have benefited substantially from the
contributions of our senior management team. In addition, our
ability to anticipate and effectively respond to changing
merchandise trends depends in part on our ability to attract and
retain key personnel in our design, merchandising, marketing and
other departments. We face intense competition in hiring and
retaining these personnel. If we fail to retain and motivate our
current personnel and attract new personnel, our business,
financial condition and results of operations could be
materially adversely affected. Also, the achievement of our
expansion plans will depend, in part, on our ability to attract
and retain additional qualified personnel as we expand.
We
rely heavily on a limited number of key suppliers, the loss of
any of which could cause a significant disruption to our
business and negatively affect our business.
Historically, we have purchased a substantial portion of our
products from a limited number of suppliers throughout the
world. During fiscal year 2010, approximately 51% of the
Companys total product purchases were sourced through a
buying agent and we expect to continue this relationship in
fiscal year 2011 and beyond. The loss of this buying agent or
any of the Companys other key suppliers or any significant
interruption in our product supply, such as manufacturing
problems or shipping delays, could have an adverse effect on our
business due to lost sales, cancellation charges, excessive
markdowns or delays in finding alternative sources, and could
result in increased costs. In addition, the current economic
conditions, including decreased access to credit, may result in
financial difficulties leading to restructurings, liquidations
and other unfavorable events for industry suppliers. Key vendors
may also be affected by natural disasters such as earthquakes,
tsunamis and flooding which could adversely impact their
operations. These suppliers may not be able to overcome any such
difficulties which could lead to interruptions in our product
supply and could also lead to increases in the costs that we pay
for our products as any surviving suppliers could be in better
positions to increase their prices. Although we have not
experienced any material disruptions in our sourcing in the past
several years, any significant disruption of supply from any of
these sources or supplier failures could have a material adverse
effect on our business, financial condition and results of
operations.
Our
reliance on foreign sources of production exposes us to a number
of risks of doing business on an international
basis.
We expect to continue our sourcing from suppliers throughout the
world, which may result in additional concentration of our
sources. As a result, we face a variety of risks generally
associated with doing business in foreign markets and importing
merchandise from abroad, including:
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political instability of foreign countries;
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imposition of new legislation or rules relating to imports that
may limit the quantity of goods which may be imported into the
United States from countries or regions;
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obligations associated with being an importer of record,
including monitoring and complying with all legal requirements;
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imposition of duties, taxes and other charges on imports;
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local business practice and political issues, including strikes
and other work stoppages and issues relating to compliance with
domestic or international labor standards which may result in
adverse publicity;
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migration and development of manufacturers, which can affect
where our products are or will be produced;
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potential delays or disruptions in shipping and related pricing
impacts, including delays or disruptions due to security
considerations;
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volatile fuel supplies and costs; and
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15
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since we transact all business in the U.S. dollar, the
devaluation of the U.S. dollar against the foreign
currencies of our suppliers countries could adversely
affect our product costs.
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Any significant disruption of production from any of these
sources could have a material adverse effect on our business,
financial condition and results of operations.
Our
business could be adversely affected if the foreign
manufacturers of our products do not use acceptable labor
practices.
We require the third-party manufacturers of the goods that we
sell to operate in compliance with applicable laws and
regulations. While our staff and buying agents periodically
visit and monitor the operations of our independent
manufacturers, we do not control these manufacturers or their
labor practices. The violation of labor or other laws by these
independent manufacturers could interrupt, or otherwise disrupt,
the shipment of products to us. The divergence of an independent
manufacturers labor practices from those generally
accepted as ethical in the United States could damage our
reputation, which may result in a decrease in customer traffic
to our stores, as well as purchasing through our catalogs and
Internet site, and therefore could adversely affect our sales,
net earnings, business, financial condition and results of
operations.
Our
business could be adversely affected by increased costs of the
raw materials and other resources that are important to our
business.
Our products are manufactured using several key raw materials,
including wool and cotton, which are subject to fluctuations in
price and availability. The prices for these raw materials can
be volatile due to the demand for fabrics, weather conditions,
supply conditions, government regulations, economic, climate and
other unpredictable factors. We purchase the raw materials for
approximately 9% of our finished products. Five vendors
accounted for over 72% of the raw materials purchased directly
by us in fiscal year 2010. The remainder of our finished
products are purchased as finished units, with the vendor
responsible for the acquisition of the raw materials. Some of
these finished unit vendors purchase raw materials from the same
suppliers as the Company. Changes in raw materials costs, such
as wool and cotton, to the vendors or to us may impact the
long-term cost of our finished products. In recent months, the
prices of cotton, wool and other production inputs have
increased significantly. The Company expects these prices to
continue to remain at these elevated levels in fiscal year 2011,
which will have a significant impact on the Companys
product costs and potentially have a negative impact on its
gross profit margin. Other costs such as fuel costs, labor costs
and healthcare costs could also have an adverse impact on our
vendors manufacturing costs and on our freight costs,
sales and marketing expenses and general and administrative
expenses. Any significant fluctuations in price or availability
of our raw materials and other resources or any significant
increase in the price or decrease in the availability of the raw
materials and other resources that are important to our business
could have a material adverse impact on our business, financial
condition and results of operations.
Our
success depends, in part, on our ability to meet the changing
preferences of our customers.
We must successfully gauge merchandise trends and changing
consumer preferences to succeed. Our success is dependent upon
our ability to gauge the tastes of our customers and to provide
merchandise that satisfies customer demand in a timely manner.
The retail clothing business fluctuates according to changes in
consumer preferences dictated, in part, by fashion, performance,
luxury and seasonality. To the extent the market for our
merchandise weakens, whether due to a decrease in demand
resulting from the troubled economy or otherwise, sales will be
adversely affected and the markdowns required to move the
resulting excess inventory will adversely affect our business,
financial condition and results of operations.
Fluctuations in the demand for tailored and casual clothing and
accessories affect our inventory levels. As our business is
seasonal, we must purchase and carry a significant amount of
inventory prior to peak selling seasons. We issue purchase
orders for the purchase and manufacture of merchandise well in
advance of the applicable selling season. As a result, we are
vulnerable to demand and pricing shifts and to suboptimal
selection and timing of merchandise purchases. In addition, lead
times for many of our purchases are long, which may make it more
difficult for us to respond rapidly to new or changing
merchandise trends or
16
consumer acceptance for our products. As a result, our business,
financial condition and results of operations could be
materially adversely affected.
Our
success depends, in part, on the volume of traffic in the retail
centers in which our stores are located and the availability of
suitable lease space.
Many of our stores are located in retail centers where sales are
affected in part by the volume of customer traffic. Customer
traffic may be adversely affected by the current economic
environment and as a result we may experience reduced sales and
store closings. In addition, a decline in the desirability of
the shopping environment in a retail center, or a decline in the
popularity of a retail center among our target consumers, could
adversely affect our business, financial condition and results
of operations.
Part of our future growth is significantly dependent on our
ability to operate stores in desirable locations with capital
investment and lease costs that allow us to maintain our
profitability. We cannot be sure as to when or whether desirable
locations will become available at reasonable costs. In
addition, we must be able to renew our existing store leases on
terms that meet our financial targets. Our failure to secure
favorable locations and lease terms initially, and upon renewal,
could result in our loss of market share and could have an
adverse effect on our business, financial condition and results
of operations.
Our
advertising, marketing and promotional activities are highly
regulated.
Our operations are subject to various federal and state consumer
protection laws and regulations related to our advertising,
marketing and promotional activities. We continue to be subject
to a consent decree mandating certain advertising practices
relating to sales promotions. We endeavor to monitor and comply
with all applicable laws and regulations (including the consent
decree) to ensure that our advertising, marketing and
promotional activities comply with all applicable legal
requirements, many of which involve subjective judgments. Any
changes in such laws or regulations, or how the laws or
regulations are enforced, or any failure to comply with such
laws or regulations could have a material adverse effect on our
business, financial condition and results of operations.
Our
dependence on third party delivery services exposes us to
business interruptions and service issues that are beyond our
control.
Our success is impacted by the timely delivery of merchandise
from our distribution facilities to our stores and customers.
Third party transportation companies deliver substantially all
of our merchandise to our stores and our customers. Some of
these third parties employ union labor. Disruptions in the
delivery of merchandise or work stoppages by employees of any of
these third parties could delay the timely delivery of
merchandise, which could result in cancelled sales, a loss of
loyalty to our brand and excess inventory. We may be required to
respond in a number of ways, many of which could decrease our
gross profits and net income and our business, financial
condition and results of operations could be materially
adversely affected.
Effects
of war, terrorism, public health events, natural disasters and
other catastrophes.
War, terrorism, public health events (including severe
infectious diseases and insect infestation), natural disasters
and other catastrophes (or the threat of any of these) in the
United States or elsewhere could damage or disrupt the national
or global economy and the sourcing, production, receipt or
shipment of our merchandise and could lead to lower customer
traffic in our stores. These catastrophes could also disrupt
Company operations in our offices, distribution centers and
stores. Any of the foregoing could result in decreased sales
that would have a material adverse impact on our business,
financial condition and results of operations.
Our
dependence on our two distribution centers located in Hampstead,
Maryland exposes us to the risk of a substantial disruption to
our business.
We concentrate the distribution of our products in two adjacent
distribution centers located in Hampstead, Maryland.
Substantially all of the merchandise that we purchase is shipped
directly to these distribution centers, where the merchandise is
prepared for shipment to our stores and our customers. If these
distribution
17
centers were to shut down or lose significant capacity for any
reason, such as due to fire or other catastrophic event or
natural disaster, our operations would likely be seriously
disrupted. As a result, we could incur longer lead times
associated with distributing our products to our stores and
customers and significantly higher operating costs during the
period prior to and after our reopening or replacing these
distribution centers. Although we maintain business interruption
and property insurance, we cannot assure you that our insurance,
if any, will be sufficient, or that insurance proceeds will be
timely paid to us, in the event our distribution centers or
systems are shut down for any reason. These shut-downs could
result in a material adverse effect on our business, financial
condition and results of operations.
Our
business could be adversely affected by increased paper,
printing and mailing costs.
Increases in postal rates, paper costs or printing costs would
affect the cost of producing and distributing our catalog and
promotional mailings and sales and marketing expenses. We rely
on discounts from the basic postal rate structure, such as
discounts for bulk mailings and sorting by zip code and carrier
routes. The unavailability of these discounts, as well as
increases in future paper, printing and postal costs could
adversely impact our earnings if we are unable to offset these
increases by raising prices or by implementing more efficient
printing, mailing, delivery and order fulfillment systems. This
could result in a material adverse effect on our business,
financial condition and results of operations.
Our
efforts to protect and enforce our intellectual property rights
or protect ourselves from the claims of third-parties may not be
effective.
Our trademarks are important to our success and competitive
position. We are the owner or exclusive licensee in the United
States of the marks JOS. A.
BANK®,
JOS. A. BANK
V.I.P.®,
JOS. A. BANK VACATION IN
PARADISE®,
VACATION IN
PARADISE®,
THE MIRACLE
COLLECTION®
and TRAVELER CREASE
®,
each of which is registered in the United States Patent and
Trademark Office. We are susceptible to others imitating our
products and infringing on our intellectual property rights.
Imitation or counterfeiting of our products or other
infringement of our intellectual property rights could diminish
the value of our brands or otherwise adversely affect our
revenues. The actions we have taken to establish and protect our
trademarks may not be adequate to prevent imitation of our
products by others or to prevent others from seeking to
invalidate our trademarks or block sales of our products alleged
to be in violation of the trademarks and intellectual property
rights of others. In addition, others may assert rights in, or
ownership of, our trademarks and other intellectual property
rights or in marks that are similar to the marks that we license
and we may not be able to successfully resolve these types of
conflicts to our satisfaction. In some cases, there may be
trademark owners who have prior rights to our marks because the
laws of certain foreign countries may not protect intellectual
property rights to the same extent as do the laws of the United
States. In other cases, there may be holders who have prior
rights to similar marks. Our failure to adequately protect and
enforce our intellectual property rights or protect ourselves
from the claims of third parties could result in a material
adverse effect on our business, financial condition and results
of operations.
We are
exposed to a number of risks involving the acceptance and
processing of credit cards, the occurrence of which could
substantially harm our business, financial condition and results
of operations.
Our acceptance of credit cards at our stores and through our
catalog and Internet channels necessarily involves the gathering
and storage of sensitive, personal information regarding our
customers. Although we believe our systems are sound, no system
is completely invulnerable to attack or loss of data. A loss of
such data could subject us to financial and legal risks, as well
as diminish our reputation and customer loyalty. Further, our
continued ability to accept and process credit cards is
dependent, in part, on our contractual relationships with our
acquiring bank (i.e. the bank at which we maintain our account
for collecting credit card payments from customers) and our
credit card processor (i.e. the third party that submits on our
behalf credit card transactions to our acquiring bank). Any
disruption or change in these contractual relationships could
interrupt our business or increase our costs. The occurrence of
any of the foregoing risks, or other risks associated with the
acceptance and processing of credit cards, could have a material
adverse effect on our business, financial condition and results
of operations.
18
We
face a number of risks relating to the maintenance of our
information systems and our use of consumer
information.
We rely heavily on information systems to manage our operations,
including a full range of retail, financial, sourcing and
merchandising systems, and regularly make investments to
upgrade, enhance or replace these systems. In addition, we are
increasingly dependent on the Internet, which is the primary
channel of our Direct Marketing segment, and centralized
computer systems and networks to process and transmit
transactions and to store electronic information. It is critical
that we maintain uninterrupted access to and operation of these
systems. These systems, including our
back-up
systems, are subject to interruption or damage from power
outages, computer and telecommunications failures, system
capacity constraints, computer viruses, security breaches and
catastrophic events such as fires, tornadoes and other natural
disasters. If these systems cease to function properly or are
damaged, we may suffer interruptions in our operations and we
may be required to make a significant investment to fix or
replace them. Any disruptions affecting our information systems,
or any delays or difficulties in transitioning to new systems or
in integrating them with current systems, could have a material
adverse effect on our business, financial condition and results
of operations. In addition, our ability to continue to operate
our business without significant interruption in the event of a
disaster or other disruption depends in part on the ability of
our information systems to operate in accordance with our
disaster recovery and business continuity plans.
We maintain a customer database which is important to our
marketing efforts. Any limitations imposed on the use of this
consumer data, whether imposed by federal, state, or local
governments or business partners, could have an adverse effect
on our future marketing activity. In addition, to the extent
that our security procedures and protection of customer
information prove to be insufficient or inadequate, we may
become subject to financial and legal risks, which could expose
us to liability and cause damage to our reputation or brand, in
addition to the adverse effect on our business, financial
condition and results of operations.
Our business has become increasingly dependent on
promotional activity and a strong holiday season.
Our net sales, net income and inventory levels fluctuate on a
seasonal basis and therefore the results for one quarter are not
necessarily indicative of the results that may be achieved for a
full fiscal year. During the fourth quarters of fiscal years
2008, 2009 and 2010, we generated approximately 36%, 36% and
37%, respectively, of our annual net sales and approximately
52%, 50% and 48%, respectively, of our annual net income, which
resulted, in part, from increased customer traffic during the
holiday season and our increased marketing efforts during this
peak selling time. Any decrease in the effectiveness of our
increased promotional activity could adversely affect our sales.
The current economic climate, including recessionary pressures,
may cause such decreases to net sales. Any reduction in retail
traffic in and around our store locations could also adversely
affect our sales. Any decrease in sales or margins, especially
during the fourth quarter, could have a disproportionate effect
on our business, financial condition and results of operations.
In addition, major storms could negatively impact our sales and
result in a material adverse effect on our business, financial
condition and results of operations.
We
will face a number of risks if we pursue growth by acquisitions
or other strategic opportunities.
We may from time to time hold discussions and negotiations
regarding strategic opportunities, including with
(i) potential investors who express an interest in making
an investment in or acquiring us, (ii) potential joint
venture partners looking toward the formation of strategic
alliances and (iii) companies that represent potential
acquisition or investment opportunities for us. We cannot assure
you that any definitive agreement will be reached regarding the
foregoing, nor do we believe that any such agreement is
necessary to implement successfully our strategic plans.
Pursuing growth by acquisitions or other strategic opportunities
will expose us to the various risks that arise therefrom, which
could result in a material adverse effect on our business,
financial condition and results of operations.
19
Our
stock price has fluctuated substantially in the past and may
continue to do so.
The market price of our common stock has fluctuated
substantially in the past and may continue to do so in the
future. The following, among other factors, may cause the market
price of our common stock to fluctuate:
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Our sales and profitability results and those of others in the
retail industry;
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Anticipation regarding our future operating results and those
generally operating in the retail industry; and
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Changes in earnings estimates by research analysts.
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In addition, the stock market has experienced price and volume
fluctuations that have affected the market price of our common
stock, as well as that of other companies, including our
competitors, and which may be unrelated to our operating
performance or the operating performance of these other
companies.
Our
charter documents, our Rights Agreement and Delaware law may
inhibit a takeover that stockholders may consider
favorable.
Provisions in our restated certificate of incorporation, our
amended and restated by-laws, our Rights Agreement and Delaware
law could delay or prevent a change of control or change in
management that would provide stockholders with a premium to the
market price of their common stock. Our Rights Agreement has
significant anti-takeover effects by causing substantial
dilution to a person or group that attempts to acquire us on
terms not approved by our Board of Directors. In addition, the
authorization of undesignated preferred stock gives our Board of
Directors the ability to issue preferred stock with voting or
other rights or preferences that could impede the success of any
attempt to change control of us. If a change of control or
change in management is delayed or prevented, this premium may
not be realized or the market price of our common stock could
decline.
Rights
of our stockholders may be negatively affected if we issue any
of the shares of preferred stock which are authorized and
available for issuance under our restated certificate of
incorporation.
After giving effect to the authorized but unissued shares of
preferred stock designated as Series A Junior Participating
Preferred Stock which are reserved for potential issuance
pursuant to our Rights Agreement, we have available for issuance
50,000 shares of preferred stock, $1.00 par value per
share. Our Board of Directors is authorized to issue any or all
of these 50,000 shares, in one or more series, without any
further action on the part of stockholders. The rights of our
stockholders may be negatively affected if we issue a series of
preferred stock in the future that has preference over our
common stock with respect to the payment of dividends or
distribution upon our liquidation, dissolution or winding up.
Litigation
or legal proceedings could expose us to significant liabilities
and could divert our managements attention and thus
negatively affect our financial results.
We are subject to various litigation and legal proceedings and
claims, including those identified in Part I, Item 3,
Legal Proceedings. Although we intend to defend the
identified matters vigorously, we are unable to predict the
outcome of these matters. Accordingly, we cannot determine
whether our insurance coverage, if any, would be sufficient to
cover the costs or potential losses, if any. Regardless of their
merit, the legal matters may result in a diversion of our
managements attention and resources and could be
disruptive to our operations. In addition, costs and potential
losses associated with these legal matters could adversely
affect our business, financial condition and results of
operations.
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Item 1B.
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UNRESOLVED
STAFF COMMENTS.
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None.
20
The Company owns one facility located in Hampstead, Maryland,
which houses, among other things, its principal executive
offices and a distribution center, and leases a second facility
also located in Hampstead, Maryland, adjacent to its owned
facility. The Company believes that its existing facilities are
well maintained and in good operating condition. The table below
presents certain information relating to the Companys
property as of March 23, 2011:
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Gross
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Owned/
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Location
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Square Feet
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Leased
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Primary Function
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Hampstead, Maryland
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315,000
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Owned
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Offices, distribution center, Direct Marketing order and
fulfillment and regional tailoring overflow shop
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Hampstead, Maryland
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289,000
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Leased
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Offices, distribution center, Direct Marketing order and
fulfillment (Lease expires September 30, 2014, with option to
renew through September 30, 2019)
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Hampstead, Maryland
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126,000
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Leased
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Offices, distribution center, Direct Marketing order and
fulfillment (Lease expires January 31, 2013 with options to
renew through September 30, 2019)
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The Company also leases three tailoring facilities in Atlanta,
Georgia, Kansas City, Kansas and Houston, Texas. In fiscal year
2010, the Atlanta and Houston facilities were relocated and
expanded. Additional office space of approximately
3,000 square feet is leased in Florida.
As of January 29, 2011, the Company had 506 stores
(consisting of 480 Full-line stores, 12 Outlet and Factory
stores and 14 Franchise stores). All Full-line stores are
leased, with the exception of one store which is located on
property owned by the Company. The Full-line stores average
approximately 4,640 square feet as of fiscal year-end 2010,
including selling, storage, tailor shop and service areas. The
Full-line stores range in size from approximately
1,400 square feet to approximately 18,900 square feet.
In most cases the Company pays a fixed annual base rent plus a
pro rata share of common area maintenance costs, real estate
taxes and insurance. Certain store leases require contingent
rental fees based on sales in addition to or in the place of
annual rental fees. Most of the Companys leases provide
for an increase in fixed rental payments at various times during
the lease term.
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Item 3.
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LEGAL
PROCEEDINGS.
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Massachusetts Laborers Annuity Fund (MLAF) was
the lead plaintiff in a class action filed in the United States
District Court for the District of Maryland against the Company,
Robert N. Wildrick, R. Neal Black and David E. Ullman (Roy T.
Lefkoe v. Jos. A. Bank Clothiers, Inc., et al., Civil
Action Number 1:06-cv-01892-WMN) (the
Class Action). The Class Action was
initially instituted on July 24, 2006. On behalf of
purchasers of the Companys stock between December 5,
2005 and June 7, 2006 (the Class Period),
the Class Action purported to make claims under
Sections 10(b) and 20(a) and
Rule 10b-5
of the Securities Exchange Act of 1934, based on the
Companys disclosures during the Class Period. The
Class Action sought unspecified damages, costs and
attorneys fees.
In late October 2009, the Company and MLAF agreed to settle the
Class Action for an amount that was within the limits of
the Companys insurance coverage. The settlement did not
have any impact on the Companys financial statements.
The Stipulation of Settlement (the Stipulation)
entered into by the Company and MLAF included a statement that,
at the time of the settlement, the substantial discovery
completed did not substantiate any of the claims asserted
against the individual defendants. By Order dated
July 8, 2010 and filed on July 20, 2010, the court
approved the settlement of the Class Action in accordance
with the Stipulation and dismissed the Class Action with
prejudice.
On November 12, 2009, Casey J. Stewart, a former employee
of the Company, on behalf of himself and all others similarly
situated, filed a Complaint against the Company in the United
States District Court for the
21
Northern District of California (Case number CV 09 5348 PJH)
alleging racial discrimination by the Company with respect to
hiring and terms and conditions of employment. Pursuant to a
Motion to Transfer Venue filed by the Company, the case was
transferred to the United States District Court for the Eastern
District of California (Case number 2:10-cv-00481-GEB-DAD). On
October 21, 2010, the parties filed a Stipulated Dismissal
of Complaint requesting the court to dismiss the Complaint with
prejudice, each party to bear its own fees and costs. By Order
dated October 21, 2010, the court dismissed the case with
prejudice.
The Company is also a party to routine litigation matters that
are incidental to its business. From time to time, other legal
matters in which the Company may be named as a defendant are
expected to arise in the normal course of the Companys
business activities. The resolution of the Companys
litigation matters cannot be accurately predicted and there is
no estimate of costs or potential losses, if any. Accordingly,
the Company cannot determine whether its insurance coverage, if
any, would be sufficient to cover such costs or potential
losses, if any, and has not recorded any provision for cost or
loss associated with these actions. It is possible that the
Companys consolidated financial statements could be
materially impacted in a particular fiscal quarter or year by an
unfavorable outcome or settlement of any of these actions.
PART II
|
|
Item 5.
|
MARKET
FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS
AND ISSUER PURCHASES OF EQUITY SECURITIES.
|
Market
Information
The Companys Common Stock is listed on The Nasdaq Global
Select Market under the trading symbol JOSB. The
following table sets forth, for the periods indicated, the range
of high and low sales prices for the Common Stock, as reported
on the Nasdaq Global Select Market.
|
|
|
|
|
|
|
|
|
|
|
High
|
|
Low
|
|
1st Quarter fiscal 2011 (through March 23, 2011)
|
|
$
|
47.95
|
|
|
$
|
41.26
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fiscal Year 2009
|
|
|
Fiscal Year 2010
|
|
|
|
High
|
|
|
Low
|
|
|
High
|
|
|
Low
|
|
|
1st Quarter
|
|
$
|
42.50
|
|
|
$
|
19.61
|
|
|
$
|
43.73
|
|
|
$
|
26.33
|
|
2nd Quarter
|
|
|
42.46
|
|
|
|
29.50
|
|
|
|
43.23
|
|
|
|
35.01
|
|
3rd Quarter
|
|
|
48.92
|
|
|
|
34.88
|
|
|
|
47.36
|
|
|
|
36.40
|
|
4th Quarter
|
|
|
45.61
|
|
|
|
38.68
|
|
|
|
45.73
|
|
|
|
39.29
|
|
On March 23, 2011, the closing sale price of the Common
Stock was $46.00.
Holders
of Record of Common Stock
As of March 23, 2011, there were 63 holders of record of
the Companys Common Stock.
Dividend
Policy
The Company intends to retain its earnings to finance the
development and expansion of its business and other strategic
opportunities and for working capital purposes, and therefore
does not anticipate paying any cash dividends in the foreseeable
future. On June 17, 2010, the Companys Board of
Directors declared a stock split in the form of a 50% stock
dividend which was distributed on August 18, 2010 to
stockholders of record as of July 30, 2010. All share and
per share amounts of common shares included in this Annual
Report on
Form 10-K
have been adjusted to reflect this stock dividend. The Company
did not declare or pay any cash dividends in fiscal year 2010.
22
Performance
Graph
The graph below compares changes in the cumulative total
stockholder return (change in stock price plus reinvested
dividends) for the period from January 27, 2006 through
January 28, 2011 of an initial investment of $100 invested
in (a) Jos. A. Banks Common Stock, (b) the Total
Return Index for the NASDAQ Stock Market (U.S.) (NASDAQ U.S.)
and (c) the Total Return Index for NASDAQ Retail Trade
Stocks (NASDAQ Retail). The measurement date for each point on
the graph is the last trading day of the fiscal year noted on
the horizontal axis. Total Return Index values are provided by
NASDAQ and prepared by the Center for Research in Security
Prices at the University of Chicago. The stock price performance
is not included to forecast or indicate future price performance.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Return Index
|
|
|
Total Return Index
|
|
|
|
Jos. A. Bank
|
|
|
NASDAQ Stock
|
|
|
NASDAQ Retail
|
|
|
|
Clothiers, Inc.
|
|
|
Market (U.S.)
|
|
|
Trade Stocks
|
|
|
January 27, 2006
|
|
$
|
100.00
|
|
|
$
|
100.00
|
|
|
$
|
100.00
|
|
February 2, 2007
|
|
$
|
77.97
|
|
|
$
|
107.77
|
|
|
$
|
109.87
|
|
February 1, 2008
|
|
$
|
67.88
|
|
|
$
|
104.08
|
|
|
$
|
97.27
|
|
January 30, 2009
|
|
$
|
68.40
|
|
|
$
|
51.21
|
|
|
$
|
62.55
|
|
January 29, 2010
|
|
$
|
104.39
|
|
|
$
|
74.75
|
|
|
$
|
92.82
|
|
January 28, 2011
|
|
$
|
156.73
|
|
|
$
|
94.98
|
|
|
$
|
115.72
|
|
This information shall not be deemed to be filed for
purposes of Section 18 of the Securities Exchange Act of
1934, as amended (the Exchange Act), or incorporated
by reference in any filing under the Securities Act of 1933, as
amended, or the Exchange Act, except as shall be expressly set
forth by specific reference in such filing.
23
|
|
Item 6.
|
SELECTED
CONSOLIDATED FINANCIAL DATA.
|
The following selected consolidated financial data as of
January 29, 2011 and January 30, 2010 and for the
three fiscal years ended January 29, 2011 have been derived
from our audited consolidated financial statements and the
related notes included elsewhere in this report. The historical
consolidated financial data at January 31, 2009,
February 2, 2008 and February 3, 2007 and for the
fiscal years ended February 2, 2008 and February 3,
2007 have been derived from our audited consolidated financial
statements and the related notes that have not been included in
this report. All fiscal years, included and not included in
these financial statements, end on the Saturday closest to
January 31 of the respective year. Fiscal years 2007, 2008, 2009
and 2010 consisted of 52 weeks, while fiscal year 2006
consisted of 53 weeks. The information should be read in
conjunction with the Consolidated Financial Statements and Notes
thereto that appear elsewhere in this Annual Report on
Form 10-K
and Item 7, Managements Discussion and Analysis
of Financial Condition and Results of Operations.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fiscal Year
|
|
|
|
2006
|
|
|
2007
|
|
|
2008
|
|
|
2009
|
|
|
2010
|
|
|
|
(In thousands, except per share information and stores)
|
|
|
Consolidated Statements of Income Information:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
$
|
546,385
|
|
|
$
|
604,010
|
|
|
$
|
695,908
|
|
|
$
|
770,316
|
|
|
$
|
858,128
|
|
Cost of goods sold
|
|
|
207,947
|
|
|
|
225,364
|
|
|
|
264,954
|
|
|
|
298,193
|
|
|
|
320,585
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
|
|
|
338,438
|
|
|
|
378,646
|
|
|
|
430,954
|
|
|
|
472,123
|
|
|
|
537,543
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales and marketing
|
|
|
212,890
|
|
|
|
242,655
|
|
|
|
277,354
|
|
|
|
293,663
|
|
|
|
326,464
|
|
General and administrative
|
|
|
52,453
|
|
|
|
53,240
|
|
|
|
58,111
|
|
|
|
61,057
|
|
|
|
69,472
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating expenses
|
|
|
265,343
|
|
|
|
295,895
|
|
|
|
335,465
|
|
|
|
354,720
|
|
|
|
395,936
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
|
73,095
|
|
|
|
82,751
|
|
|
|
95,489
|
|
|
|
117,403
|
|
|
|
141,607
|
|
Total other income (expense)
|
|
|
(938
|
)
|
|
|
1,582
|
|
|
|
477
|
|
|
|
(20
|
)
|
|
|
453
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before provision for income taxes
|
|
|
72,157
|
|
|
|
84,333
|
|
|
|
95,966
|
|
|
|
117,383
|
|
|
|
142,060
|
|
Provision for income taxes
|
|
|
28,935
|
|
|
|
34,165
|
|
|
|
37,558
|
|
|
|
46,228
|
|
|
|
56,261
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
43,222
|
|
|
$
|
50,168
|
|
|
$
|
58,408
|
|
|
$
|
71,155
|
|
|
$
|
85,799
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Per share information diluted(a):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income per share
|
|
$
|
1.57
|
|
|
$
|
1.82
|
|
|
$
|
2.11
|
|
|
$
|
2.56
|
|
|
$
|
3.08
|
|
Diluted weighted average number of shares
|
|
|
27,513
|
|
|
|
27,630
|
|
|
|
27,668
|
|
|
|
27,785
|
|
|
|
27,851
|
|
Consolidated Balance Sheet Information (as of end of fiscal
year):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
43,080
|
|
|
$
|
82,082
|
|
|
$
|
122,875
|
|
|
$
|
21,853
|
|
|
$
|
80,979
|
|
Short-term investments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
169,736
|
|
|
|
189,789
|
|
Working capital
|
|
|
136,562
|
|
|
|
187,134
|
|
|
|
246,127
|
|
|
|
323,260
|
|
|
|
408,151
|
|
Total assets
|
|
|
368,392
|
|
|
|
440,098
|
|
|
|
491,366
|
|
|
|
556,364
|
|
|
|
662,037
|
|
Revolving and term debt
|
|
|
412
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total noncurrent liabilities (including debt)
|
|
|
46,416
|
|
|
|
52,712
|
|
|
|
58,383
|
|
|
|
54,509
|
|
|
|
54,415
|
|
Stockholders equity
|
|
|
208,234
|
|
|
|
261,165
|
|
|
|
321,813
|
|
|
|
393,310
|
|
|
|
482,676
|
|
Capital expenditures
|
|
|
31,141
|
|
|
|
27,696
|
|
|
|
35,105
|
|
|
|
16,333
|
|
|
|
29,352
|
|
Other Data (as of end of fiscal year):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of stores(b)
|
|
|
376
|
|
|
|
422
|
|
|
|
460
|
|
|
|
473
|
|
|
|
506
|
|
|
|
|
(a) |
|
On June 17, 2010, the Companys Board of Directors
declared a stock split in the form of a 50% stock dividend which
was distributed on August 18, 2010 to stockholders of
record as of July 30, 2010. Unless otherwise indicated, all
historical weighted average share and per share amounts and all
references to the number of common shares elsewhere in the
Consolidated Financial Statements, and Notes thereto, have been
restated to reflect the stock dividend. |
|
(b) |
|
Includes Franchise stores. |
24
|
|
Item 7.
|
MANAGEMENTS
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS.
|
The information that follows should be read in conjunction with
the Consolidated Financial Statements and Notes thereto that
appear elsewhere in this Annual Report on
Form 10-K.
Overview
Net income in fiscal year 2010 increased 20.6% to approximately
$85.8 million, as compared with approximately
$71.2 million in fiscal year 2009. The increased earnings
in fiscal year 2010 were primarily attributable to:
|
|
|
|
|
11.4% increase in net sales, driven by a 9.4% sales increase in
the Stores segment and a 24.4% increase in the Direct Marketing
segment sales;
|
|
|
|
130 basis point increase in gross profit margin;
|
|
|
|
7.0% increase in comparable store sales;
|
|
|
|
10 basis point decrease in sales and marketing costs as a
percentage of sales driven primarily by the leveraging of
occupancy costs and Stores and Direct Marketing payroll and
benefits costs, partially offset by higher other variable
selling costs and advertising and marketing costs as a
percentage of sales; and
|
|
|
|
20 basis point increase in general and administrative costs
as a percentage of sales driven primarily by higher other
corporate overhead costs and professional fees.
|
The Company had 506 stores as of the end of fiscal year 2010,
which consisted of 480 Full-line stores, 12 Company-owned Outlet
and Factory stores and 14 stores operated by franchisees. In the
past five years, the Company has opened 190 new stores as its
infrastructure and performance have improved. Specifically,
there were 52 new stores opened in fiscal year 2006, 48 new
stores opened in fiscal year 2007, 40 new stores opened in
fiscal year 2008, 14 new stores opened in fiscal year 2009 and
36 new stores opened in fiscal 2010.
The Company expects to open approximately 40 to 50 stores in
fiscal year 2011, including 10 to 12 new Factory stores. In the
future, the Company believes that it can grow the chain to
approximately 600 Full-line stores and 50 to 75 Factory stores
in the United States, depending on the performance of the
Company over the next several years and the development of the
Factory store concept, among other factors.
Capital expenditures are expected to be approximately $33 to
$38 million in fiscal year 2011, primarily to fund the
anticipated opening of approximately 40 to 50 new stores, the
renovation
and/or
relocation of several stores, expansion of its distribution
center capacity and the implementation of various systems
projects. The capital expenditures include the cost of the
construction of leasehold improvements for new stores and the
cost of renovating or relocating several stores, of which $5 to
$7 million is expected to be reimbursed through landlord
contributions.
The Company expects total inventories to increase in fiscal year
2011 at a rate higher than experienced in recent years primarily
as a result of the replenishment of units sold in fiscal 2010,
new store openings, continued sales growth, higher inventory
sourcing costs and a larger buildup of core product inventory
levels in anticipation that future costs of products will
continue to remain at higher levels.
The Company ended fiscal year 2010 with $270.8 million in
cash and cash equivalents and short-term investments and has had
no debt outstanding since the end of fiscal year 2007. The
Company generated $106.2 million of cash from operating
activities in fiscal year 2010 which included $85.8 million
of net income, $24.5 million of depreciation and
amortization, a $15.0 million increase in accounts payable
and accrued expense, partially offset by a $15.0 million
increase in inventory levels. This cash from operating
activities funded, among other things, the $29.4 million in
capital expenditures.
25
Critical
Accounting Policies and Estimates
In preparing the consolidated financial statements, a number of
assumptions and estimates are made that, in the judgment of
management, are proper in light of existing general economic and
company-specific circumstances. For a detailed discussion on the
application of these and other accounting policies, see
Note 1 in the Consolidated Financial Statements in this
Annual Report on
Form 10-K.
Inventory The Company records inventory at
the lower of cost or market (LCM). Cost is
determined using the
first-in,
first-out method. The estimated market value is based on
assumptions for future demand and related pricing. The Company
reduces the carrying value of inventory to net realizable value
where cost exceeds estimated selling price less costs of
disposal.
Managements sales assumptions regarding sales below cost
are based on the Companys experience that most of the
Companys inventory is sold through the Companys
primary sales channels, with virtually no inventory being
liquidated through bulk sales to third parties. The
Companys LCM estimates for inventory that have been made
in the past have been very reliable as a significant portion of
its sales (over two-thirds in fiscal year 2010) are of
classic traditional core products that are part of on-going
programs and that bear low risk of write-down below cost. These
products include items such as navy and gray suits, navy blazers
and white and blue button-down shirts, etc. To limit the need to
sell significant amounts of product below cost, all product
categories are closely monitored in an attempt to identify and
correct situations in which aging goals have not been, or are
reasonably likely to not be, achieved. In addition, the
Companys strong gross profit margins enable the Company to
sell substantially all of its products above cost.
To calculate the estimated market value of its inventory, the
Company periodically performs a detailed review of all of its
major inventory classes and stock-keeping units and performs an
analytical evaluation of aged inventory on a quarterly basis.
Semi-annually, the Company compares the on-hand units and
season-to-date
unit sales (including actual selling prices) to the sales trend
and estimated prices required to sell the units in the future,
which enables the Company to estimate the amount which may have
to be sold below cost. Substantially all of the units sold below
cost are sold in the Companys Outlet and Factory stores,
through the Internet websites and catalogs or on clearance at
the Full-line stores, typically within 24 months of
purchase. The Companys costs in excess of selling price
for units sold below cost totaled approximately
$1.4 million, $1.2 million and $1.8 million in
fiscal years 2008, 2009 and 2010, respectively. The Company
reduces the carrying amount of its current inventory value for
product that may be sold below its cost. If the amount of
inventory which is sold below its cost differs from the
estimate, the Companys inventory valuation adjustment
could change.
Asset Valuation Long-lived assets, such as
property, plant and equipment subject to depreciation, are
reviewed for impairment to determine whether events or changes
in circumstances indicate that the carrying amount of an asset
may not be recoverable. Recoverability of assets to be held and
used is measured by a comparison of the carrying amount of an
asset to estimated undiscounted future cash flows expected to be
generated by the asset. If the carrying amount of an asset
exceeds its estimated future cash flows, an impairment charge is
recognized in the amount by which the carrying amount of the
asset exceeds the estimated fair value of the asset. The asset
valuation estimate is principally dependent on the
Companys ability to generate profits at both the Company
and store levels. These levels are principally driven by the
sales and gross profit trends that are closely monitored by the
Company. While the Company performs a quarterly review of its
long-lived assets to determine if impairment exists, the fourth
quarter is typically the most significant quarter to make such a
determination since it provides the best indication of
performance trends in the individual stores. During fiscal years
2008, 2009 and 2010, the Company recognized impairment charges
of $1.2 million, $1.6 million and $1.2 million,
respectively, relating to several stores within its Stores
segment. The charges were included in Sales and
marketing in the Consolidated Statements of Income. The
aggregate fair value of the property plant and equipment
recorded for the stores impaired in fiscal years 2008, 2009 and
2010 were estimated to be $0.1 million, $0.3 million
and $0.2 million, respectively. The fair value measurements
related to these assets are considered to fall under
level 3 of the fair value hierarchy of ASC 820,
Fair Value Measurements and Disclosures, since the
valuations are based on significant unobservable inputs. These
valuations are based on discounted cash flow analyses with the
significant
26
unobservable inputs being the future projected cash flows which
are reflective of the Companys best estimates and the
discount rates which the Company believes are representative of
arms-length third-party required rates of returns.
Lease Accounting The Company uses a
consistent lease period (generally, the initial non-cancelable
lease term plus renewal option periods provided for in the lease
that can be reasonably assured) when calculating amortization of
leasehold improvements and in determining straight-line rent
expense and classification of its leases as either an operating
lease or a capital lease. The lease term and straight-line rent
expense commences on the date when the Company takes possession
and has the right to control use of the leased premises. Funds
received from the lessor intended to reimburse the Company for
the costs of leasehold improvements are recorded as deferred
rent resulting from a lease incentive and amortized over the
lease term as a reduction to rent expense.
While the Company has taken reasonable care in preparing these
estimates and making these judgments, actual results could and
probably will differ from the estimates. Management believes any
difference in the actual results from the estimates will not
have a material effect upon the Companys financial
position or results of operations. These estimates, among other
things, were discussed by management with the Companys
Audit Committee.
Recently Issued Accounting Standards In
October 2009, the FASB issued ASU
2009-13,
Multiple-Deliverable Revenue Arrangements (ASU
2009-13).
ASU 2009-13
addresses revenue recognition of multiple-element sales
arrangements. It establishes a selling price hierarchy for
determining the selling price of each product or service, with
vendor-specific objective evidence (VSOE) at the
highest level, third-party evidence of VSOE at the intermediate
level, and a best estimate at the lowest level. It replaces
fair value with selling price in revenue
allocation guidance. It also significantly expands the
disclosure requirements for such arrangements. ASU
2009-13 is
effective prospectively for sales entered into or materially
modified in fiscal years beginning on or after June 15,
2010, with early adoption permitted. The Company is currently
evaluating the impact ASU
2009-13 may
have on its consolidated financial statements.
Recently Proposed Amendments to Accounting
Standards In August 2010, the FASB issued an
exposure draft, Leases (the Exposure
Draft), which would replace the existing guidance in
ASC 840, Leases. Under the Exposure Draft, a
lessees rights and obligations under all leases, including
existing and new arrangements, would be recognized as assets and
liabilities, respectively, on the balance sheet. The comment
period for the Exposure Draft ended on December 15, 2010
and a final standard is expected to be issued in 2011. When and
if the proposed guidance becomes effective, it will likely have
a significant impact on the Companys consolidated
financial statements. However, as the Exposure Draft is still in
process, the Company is unable to determine at this time the
impact this proposed change in accounting may have on its
consolidated financial statements.
27
Results
of Operations
The following table is derived from the Companys
Consolidated Statements of Income and sets forth, for the
periods indicated, certain items included in the Consolidated
Statements of Income expressed as a percentage of net sales.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Percentage of Net Sales
|
|
|
|
Fiscal Year
|
|
|
|
2008
|
|
|
2009
|
|
|
2010
|
|
|
Net sales
|
|
|
100.0
|
%
|
|
|
100.0
|
%
|
|
|
100.0
|
%
|
Cost of goods sold
|
|
|
38.1
|
|
|
|
38.7
|
|
|
|
37.4
|
|
Gross profit
|
|
|
61.9
|
|
|
|
61.3
|
|
|
|
62.6
|
|
Sales and marketing expenses
|
|
|
39.9
|
|
|
|
38.1
|
|
|
|
38.0
|
|
General and administrative expenses
|
|
|
8.4
|
|
|
|
7.9
|
|
|
|
8.1
|
|
Total operating expenses
|
|
|
48.2
|
|
|
|
46.0
|
|
|
|
46.1
|
|
Operating income
|
|
|
13.7
|
|
|
|
15.2
|
|
|
|
16.5
|
|
Total other income (expense)
|
|
|
0.1
|
|
|
|
|
|
|
|
0.1
|
|
Income before provision for income taxes
|
|
|
13.8
|
|
|
|
15.2
|
|
|
|
16.6
|
|
Provision for income taxes
|
|
|
5.4
|
|
|
|
6.0
|
|
|
|
6.6
|
|
Net income
|
|
|
8.4
|
%
|
|
|
9.2
|
%
|
|
|
10.0
|
%
|
Fiscal
Year 2010 Compared to Fiscal Year 2009
Net Sales Net sales increased 11.4% to
$858.1 million in fiscal year 2010, as compared with
$770.3 million in fiscal year 2009. The Stores segment
sales increased 9.4% in fiscal year 2010 due primarily to a 7.0%
increase in comparable Store sales and the opening of 36 new
stores (and the closing of three stores) as shown below.
Comparable store sales include merchandise and tuxedo rental
sales generated in all Company-owned stores that have been open
for at least thirteen full months. The 7.0% increase in
comparable store sales in fiscal year 2010 was led by increased
traffic (as measured by number of transactions) and higher items
per transaction, partially offset by lower dollars per
transaction.
Comparing fiscal year 2010 to fiscal year 2009, Direct Marketing
sales increased 24.4%, driven primarily by increases in sales in
the Internet channel, which represents the major portion of this
reportable segment. The increases in the Internet channel were
primarily the result of higher website traffic. The Internet
channel also benefited from the new Big and Tall website related
to the Companys Big and Tall product offerings launched
during fiscal year 2010. Additionally, the segments sales
for fiscal year 2010 were positively impacted by a slight
increase in catalog call center sales.
With respect to the major product categories, dress shirts,
other tailored clothing (particularly sportcoats, blazers and
dress pants), sportswear and suits all generated strong unit
sales increases in fiscal year 2010. Sales of the more luxurious
Signature and Signature Gold products, which together
represented over 25% of total merchandise sales in fiscal year
2010, increased by over 10% as compared to fiscal year 2009. For
fiscal year 2010, suits represented over 30% of total
merchandise sales. Merchandise sales exclude tailoring, tuxedo
rental and franchise fee revenue.
28
The following table provides information regarding the number of
stores opened and closed during fiscal years 2009 and 2010:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fiscal Year 2009
|
|
|
Fiscal Year 2010
|
|
|
|
|
|
|
Square
|
|
|
|
|
|
Square
|
|
|
|
Stores
|
|
|
Feet*
|
|
|
Stores
|
|
|
Feet*
|
|
|
Stores open at the beginning of the year
|
|
|
460
|
|
|
|
2,091
|
|
|
|
473
|
|
|
|
2,131
|
|
Stores opened
|
|
|
14
|
|
|
|
45
|
|
|
|
36
|
|
|
|
160
|
|
Stores closed
|
|
|
(1
|
)
|
|
|
(5
|
)
|
|
|
(3
|
)
|
|
|
(9
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stores open at the end of the year
|
|
|
473
|
|
|
|
2,131
|
|
|
|
506
|
|
|
|
2,282
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* |
|
Square feet are presented in thousands and exclude the square
footage of the Companys Franchise stores. Square feet
include a net decrease of 11 square feet in fiscal year
2009 and a net increase of 14 square feet in fiscal year
2010 due to relocations or renovations in several stores. |
Gross Profit The Companys gross
profit represents net sales less cost of goods sold. Cost of
goods sold primarily includes the cost of merchandise, the cost
of tailoring and freight from vendors to the distribution center
and from the distribution center to the stores. This gross
profit classification may not be comparable to the
classification used by certain other entities. Some entities
include distribution (including depreciation), store occupancy,
buying and other costs in cost of goods sold. Other entities
(including the Company) exclude such costs from gross profit,
including them instead in general and administrative
and/or sales
and marketing expenses.
Gross profit totaled $537.5 million or 62.6% of net sales
in fiscal year 2010, as compared with $472.1 million or
61.3% of net sales in fiscal year 2009, an increase in gross
profit dollars of $65.4 million and an increase in the
gross profit margin (gross profit as a percent of net sales) of
130 basis points. The increases in the gross profit margin
were mainly the result of higher initial
mark-ups as
compared to the prior year period, driven primarily by improved
sourcing. The improvement was also due in part to a change in
the product mix with a lower proportion of clearance items sold
as compared to fiscal year 2009. These increases were partially
offset by higher markdowns as a result of increased promotional
activity to drive sales, especially during the second half of
fiscal year 2010. As stated in this Annual Report on
Form 10-K,
the Company is subject to certain risks that may affect its
gross profit, including risks of doing business on an
international basis, increased costs of raw materials and other
resources and changes in economic conditions. The Company
expects to continue to be subject to these gross profit risks in
the future. Specifically, with respect to the costs of raw
materials, the Companys products are manufactured using
several key raw materials, most notably wool and cotton. In
recent months, the prices of cotton, wool and other production
inputs have increased significantly. The Company expects these
prices to continue to remain at these elevated levels in fiscal
year 2011, which will have a significant impact on the
Companys product costs and potentially have a negative
impact on its gross profit margin. Additionally, the
Companys gross profit margin may be negatively impacted
during the development phase of some of its new business
initiatives such as the newly-launched tuxedo rental business
and the Factory store concept.
Sales and Marketing Expenses Sales and
marketing expenses, which consist primarily of a) Full-line
Store, Outlet and Factory store and Direct Marketing occupancy,
payroll, selling and other variable costs (which include such
costs as shipping costs to customers and credit card processing
fees) and b) total Company advertising and marketing
expenses. Sales and marketing expenses increased to
$326.5 million in fiscal year 2010 from $293.7 million
in fiscal year 2009. As a percentage of net sales, sales and
marketing expenses decreased to 38.0% in fiscal year 2010, as
compared with 38.1% in fiscal year 2009. The decrease as a
percentage of net sales was driven primarily by the leveraging
of occupancy costs and Stores and Direct Marketing payroll and
benefits costs achieved primarily through strong sales growth
and cost control initiatives. These improvements were partially
offset by higher other variable selling costs as a percentage of
sales due largely to higher shipping costs to customers driven
by the strong Direct Marketing sales and lower shipping cost
efficiency and higher advertising and marketing costs as a
percentage of sales due primarily to increased promotional
activity as compared to last year.
29
The $32.8 million increase in sales and marketing expenses
relates primarily to expanded advertising programs, expenses
supporting the opening of the 36 new stores in fiscal year 2010,
a full year of costs from the 14 new stores opened in fiscal
year 2009 and higher sales. The cost increases include
a) $11.6 million of other variable selling costs,
including shipping costs to customers, b) $8.0 million
of media advertising, catalog and other marketing costs,
c) $7.4 million of Stores and Direct Marketing payroll
and benefits costs, and d) $5.8 million of occupancy
costs. The Company expects sales and marketing expenses to
increase in fiscal year 2011 primarily as a result of its
anticipated opening of 40 to 50 new stores in fiscal year 2011,
the full year operation of stores that were opened during fiscal
year 2010, an increase in advertising expenditures, driven both
by volume and price increases, and costs related to new business
initiatives.
General and Administrative Expenses General
and administrative expenses (G&A), which
consist primarily of corporate and distribution center costs,
increased $8.4 million in fiscal year 2010 to
$69.5 million from $61.1 million in fiscal year 2009.
As a percentage of net sales, G&A expenses increased to
8.1% in fiscal year 2010, as compared with 7.9% in fiscal year
2009. The increase as a percentage of net sales was driven
primarily by higher other corporate overhead costs and
professional fees. The increase in G&A expenses was
primarily due to higher total corporate costs, including
corporate compensation and benefits costs, taxes and other
corporate overhead costs. The net increase in corporate costs of
$6.8 million was primarily driven by
a) $3.3 million of higher corporate compensation
(including total company performance-based incentive
compensation other than commissions) and benefits costs,
b) $1.4 million of higher professional fees including
outsourced services, and c) $2.1 million of higher
other overhead costs. Continued growth in the Stores and Direct
Marketing segments may result in further increases in G&A.
Distribution center costs increased $1.6 million in fiscal
year 2010, primarily due to a) $0.9 million of higher
payroll costs and b) $0.7 million of higher occupancy,
supplies, postage and other miscellaneous costs. The Company
expects distribution center costs to increase in fiscal year
2011 as it expects to process an increasing amount of inventory
units to support future growth and increased costs related to
adding more warehousing space.
Other Income (Expense) The Companys
Other income (expense) consists solely of net interest income
(expense). Other income (expense) for fiscal year 2010 was
$0.5 million of income as compared to less than
$0.1 million of expense for fiscal year 2009. The
improvement over fiscal year 2009 was due primarily to higher
average cash and cash equivalents and short-term investment
balances during the fiscal year 2010 period and lower financing
fees in fiscal year 2010 due to the expiration of the
Companys credit facility in the first quarter of fiscal
year 2010.
Income Taxes The fiscal year 2010
effective income tax rate was 39.6%, as compared with 39.4% for
fiscal year 2009. The increase during fiscal year 2010 was
largely related to higher state income taxes. During the third
quarter of fiscal year 2010, the Company realigned its legal
entity structure to more appropriately reflect its operational
organization. As a result, the Company anticipates that it will
incur lower state income tax liabilities beginning in fiscal
year 2011 and thereafter, assuming no significant changes to
U.S. federal or state income tax rules.
Significant changes to U.S. federal or state income tax
rules could occur as part of future legislation. Such changes
could influence the Companys future income tax expense
and/or the
timing of income tax deductions. The impact of such changes on
the Companys business operations and financial statements
remains uncertain. However, as the possibility of any enactment
progresses, the Company will continue to monitor current
developments and assess the potential implications of these tax
law changes on its business and consolidated financial
statements.
The Company files a federal income tax return and state and
local income tax returns in various jurisdictions. The Internal
Revenue Service (IRS) has audited tax returns
through fiscal year 2008, including its examination of the tax
return for fiscal years 2007 and 2008 which was finalized in
October 2010. No material adjustments were required to these tax
returns as a result of the examination by the IRS. For the years
before fiscal year 2007, the majority of the Companys
state and local income tax returns are no longer subject to
examinations by taxing authorities.
30
Fiscal
Year 2009 Compared to Fiscal Year 2008
Net Sales Net sales increased 10.7% to
$770.3 million in fiscal year 2009, as compared with
$695.9 million in fiscal year 2008. The Stores segment
sales increased 10.6% in fiscal year 2009 due primarily to a
6.3% increase in comparable Store sales and the opening of 14
new stores (and the closing of one store) as shown below. The
6.3% increase in comparable store sales in fiscal year 2009 was
led by increased traffic, higher items per transaction and
higher dollars per transaction. Comparing fiscal year 2009 to
fiscal year 2008, Direct Marketing sales increased 12.2%, driven
by increases in sales in the Internet channel, which represents
the major portion of this reportable segment, partially offset
by the continued decline of sales through the catalog call
center. The sales increase in the Internet channel was largely
related to the Companys upgrade of its existing Internet
infrastructure. The updated platform was rolled out in the third
quarter of fiscal year 2009 and added certain features to
further enhance the customer shopping experience, in addition to
supporting many of the creative promotional and sale events that
were previously offered only in the Companys Stores
segment.
All major product categories generated unit sales increases in
fiscal year 2009, led by sales of suits followed by sales of
sportswear and other tailored clothing. Sales of the more
luxurious Signature and Signature Gold products, which together
represented over 25% of total merchandise sales in fiscal year
2009, increased by over 20% as compared to fiscal year 2008. For
fiscal year 2009, suits represented over 30% of total
merchandise sales.
The following table provides information regarding the number of
stores opened and closed during fiscal years 2008 and 2009:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fiscal Year 2008
|
|
|
Fiscal Year 2009
|
|
|
|
|
|
|
Square
|
|
|
|
|
|
Square
|
|
|
|
Stores
|
|
|
Feet*
|
|
|
Stores
|
|
|
Feet*
|
|
|
Stores open at the beginning of the year
|
|
|
422
|
|
|
|
1,935
|
|
|
|
460
|
|
|
|
2,091
|
|
Stores opened
|
|
|
40
|
|
|
|
164
|
|
|
|
14
|
|
|
|
45
|
|
Stores closed
|
|
|
(2
|
)
|
|
|
(8
|
)
|
|
|
(1
|
)
|
|
|
(5
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stores open at the end of the year
|
|
|
460
|
|
|
|
2,091
|
|
|
|
473
|
|
|
|
2,131
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* |
|
Square feet are presented in thousands and exclude the square
footage of the Companys Franchise stores. Square feet
include a net decrease of 11 square feet in fiscal year
2009 due to relocations or renovations in several stores. |
Gross Profit Gross profit totaled
$472.1 million or 61.3% of net sales in fiscal year 2009,
as compared with $431.0 million or 61.9% of net sales in
fiscal year 2008, an increase in gross profit dollars of
$41.1 million and a decrease in the gross profit margin of
60 basis points. As stated in this Annual Report on
Form 10-K,
the Company is subject to certain risks that may affect its
gross profit, including risks of doing business on an
international basis, increased costs of raw materials and other
resources and changes in economic conditions. The Company
experienced certain of these risks during fiscal year 2009,
particularly a weaker economic environment, which resulted in
lower merchandise gross margins due primarily to increased
promotional activity. These declines were partially offset by
higher initial
mark-ups,
particularly during the second half of fiscal year 2009. The
lower merchandise gross margins were partially offset by lower
freight costs in fiscal year 2009 compared to the same period in
fiscal year 2008. Except for the gross profit margins on the
dress shirts category which increased slightly, gross profit
margins declined across all of the other major product
categories due primarily to higher promotional activity in
fiscal year 2009.
Sales and Marketing Expenses Sales and
marketing expenses increased to $293.7 million in fiscal
year 2009 from $277.4 million in fiscal year 2008. As a
percentage of net sales, sales and marketing expenses decreased
to 38.1% in fiscal year 2009, as compared with 39.9% in fiscal
year 2008. The decrease as a percentage of net sales was driven
primarily by the leveraging of occupancy costs, store employee
compensation costs, other variable selling costs and advertising
and marketing costs. The improved leverage for these cost
categories was achieved primarily through cost control
initiatives, rent and vendor negotiations and
31
process improvements. The $16.3 million increase in sales
and marketing expenses relates primarily to expenses supporting
the opening of the 14 new stores in fiscal year 2009, a full
year of costs from the 40 new stores opened in fiscal year 2008,
higher sales and expanded advertising programs. The cost
increases include a) $6.8 million of payroll, benefits
and related costs, b) $4.0 million of occupancy costs,
c) $4.1 million of media advertising, catalog and
other marketing costs, which occurred primarily in the fourth
quarter to support the needs of the highest sales season, and
d) $1.4 million of other variable selling costs.
General and Administrative Expenses G&A
expenses increased $3.0 million in fiscal year 2009 to
$61.1 million from $58.1 million in fiscal year 2008.
As a percentage of net sales, G&A expenses decreased to
7.9% in fiscal year 2009, as compared with 8.4% in fiscal year
2008. The decrease as a percentage of net sales was driven
primarily by the leveraging of the Companys corporate
costs primarily through cost control initiatives. The increase
in G&A expenses was primarily due to higher total corporate
costs, including payroll, all company incentive compensation,
taxes and other corporate overhead costs. The net increase in
corporate costs of $2.8 million was primarily driven by
a) $1.0 million of higher payroll, incentive
compensation and group medical costs, b) $0.4 million
of higher occupancy costs, and c) $1.4 million of
higher other overhead costs, which was driven largely by higher
professional fees.
Distribution center costs increased $0.2 million in fiscal
year 2009, primarily due to a) $0.1 million of higher
payroll costs and b) $0.1 million of higher occupancy,
supplies, postage and other miscellaneous costs.
Other Income (Expense) Other income (expense)
for fiscal year 2009 was less than $0.1 million of expense
as compared to $0.5 million of income for fiscal year 2008.
The decrease was due primarily to lower interest income which
resulted from lower average market interest rates in fiscal year
2009 as compared to fiscal year 2008, partially offset by higher
average cash and cash equivalents and short-term investment
balances during fiscal year 2009.
Income Taxes The fiscal year 2009
effective income tax rate was 39.4%, as compared with 39.1% for
fiscal year 2008. The increase is primarily related to higher
state taxes in fiscal year 2009.
Liquidity
and Capital Resources
The Companys principal sources of liquidity are its cash
from operations, cash and cash equivalents and short-term
investments. These sources of liquidity are used for the
Companys ongoing cash requirements. During the past
several years and through the first quarter of fiscal year 2010,
the Company maintained a $100 million credit facility with
a maturity date of April 30, 2010. Based on the
Companys cash and short-term investment positions, and
projected cash needs and market conditions, the Company elected
not to negotiate a renewal or replacement of the credit
facility. As a result, the credit facility expired on
April 30, 2010 in accordance with its terms.
The following table summarizes the Companys sources and
uses of funds as reflected in the Condensed Consolidated
Statements of Cash Flows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fiscal Year
|
|
|
|
2008
|
|
|
2009
|
|
|
2010
|
|
|
|
(In thousands)
|
|
|
Cash provided by (used in):
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating activities
|
|
$
|
73,540
|
|
|
$
|
84,748
|
|
|
$
|
106,239
|
|
Investing activities (Including $169,736 and $20,053 of net
purchases of short-term investment in fiscal year 2009 and 2010,
respectively)
|
|
|
(34,908
|
)
|
|
|
(186,069
|
)
|
|
|
(49,405
|
)
|
Financing activities
|
|
|
2,161
|
|
|
|
299
|
|
|
|
2,292
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net increase (decrease) in cash and cash equivalents
|
|
$
|
40,793
|
|
|
$
|
(101,022
|
)
|
|
$
|
59,126
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The Companys cash and cash equivalents consist primarily
of U.S. Treasury bills with original maturities of
90 days or less and overnight federally-sponsored agency
notes. The Companys short-term investments consist of
U.S. Treasury bills with remaining maturities of less than
one year, excluding investments with
32
original maturities of 90 days or less. The Company ended
fiscal year 2010 with $81.0 million of cash and cash
equivalents and $189.8 million of short-term investments,
for a total of $270.8 million, as compared with
$21.9 million of cash and cash equivalents and
$169.7 million of short-term investments, for a total of
$191.6 million at the end of fiscal year 2009. The Company
had no debt outstanding at the end of fiscal years 2010 and 2009
and has had no debt outstanding since the end of fiscal year
2007.
Cash provided by the Companys operating activities of
$106.2 million in fiscal year 2010 was primarily impacted
by net income of $85.8 million and depreciation and
amortization of $24.5 million and other non-cash items of
$5.5 million, partially offset by an increase in net
operating working capital and other operating items of
$9.6 million. The increase in operating working capital and
other operating items included the following:
|
|
|
|
|
an increase in inventory of $15.0 million related largely
to new store openings and the Companys new business
initiatives;
|
|
|
|
an increase in accounts receivable of $3.7 million due
primarily to higher credit card receivables from transactions
through American Express, MasterCard and Visa as a result of
increased sales near the end of the fiscal year 2010 as compared
with the end of fiscal year 2009;
|
|
|
|
an increase in prepaid and other assets of $3.5 million due
primarily to an increase in landlord contributions as a result
of the new store openings during 2010;
|
|
|
|
an increase in accrued expenses totaling $1.7 million
(excluding accrued property, plant and equipment) related
primarily to increases in gift cards and certificates payable,
accrued advertising and accrued compensation, partially offset
by lower accrued income taxes; and
|
|
|
|
an increase in accounts payable of $13.3 million due
primarily to the timing of payments to vendors.
|
Accounts payable represent all short-term liabilities for which
the Company has received a vendor invoice prior to the end of
the reporting period. Accrued expenses represent all other
short-term liabilities related to, among other things, vendors
from whom invoices have not been received, employee
compensation, federal and state income taxes and unearned gift
cards and gift certificates.
Cash used for investing activities during fiscal year 2010 of
$49.4 million relates primarily to payments of
$29.4 million for capital expenditures and
$20.0 million of net purchases of short-term investments.
The capital expenditures in fiscal year 2010 related to the
opening of 36 stores, the renovation
and/or
relocation of several stores, the expansion of the
Companys distribution and office space, expenditures
related to the Companys regional tailor shops,
expenditures related to new business initiatives including
tuxedo rentals and Factory stores and the implementation of
various systems projects including the development of two new
websites under its existing Internet infrastructure. In
addition, capital expenditures for fiscal year 2010 include
payments of property, plant and equipment additions accrued at
year-end fiscal year 2009 but paid for in fiscal year 2010.
Cash provided by financing activities for fiscal year 2010 of
$2.3 million relates primarily to net proceeds from the
exercise of stock options (including the related tax benefits).
Cash provided by the Companys operating activities of
$84.7 million in fiscal year 2009 was primarily impacted by
net income of $71.2 million and depreciation and
amortization of $22.4 million, offset by an increase in net
operating working capital and other operating items of
$8.9 million. The increase in operating working capital and
other operating items included an increase of $9.1 million
in inventories due largely to the opening of new stores and a
reduction in accounts payable totaling $11.5 million
related primarily to the timing of payments to vendors. These
cash outflows were partially offset by an increase of
$12.1 million in accrued expenses related primarily to
higher accrued compensation and accrued income taxes. Cash used
for investing activities during fiscal year 2009 of
$186.1 million relates primarily to payments for capital
expenditures of $16.3 million and $169.7 million of
net purchases of short-term investments. The capital
expenditures in fiscal year 2009 related to the opening of 14
stores, the renovation
and/or
relocation of several stores, the replacement of the
Companys existing Internet infrastructure and payments for
various system initiatives. Cash provided by financing
activities for fiscal year 2009 of $0.3 million relates to
net proceeds from the exercise of stock options (including the
related tax benefits).
33
Cash provided by the Companys operating activities in
fiscal year 2008 was primarily impacted by net income of
$58.4 million and depreciation and amortization of
$20.6 million, offset by an increase in net operating
working capital and other operating items of $5.5 million.
The increase in operating working capital and other operating
items included an increase of $2.4 million in inventories
and a reduction in accounts payable of $17.6 million
related primarily to the timing of payments to vendors. These
cash outflows were partially offset by an increase totaling
$12.6 million in accrued expenses and deferred rent
primarily related to new store growth and higher accrued
advertising expenses. Cash used in investing activities during
fiscal year 2008 of $34.9 million relates primarily to
payments for capital expenditures for new stores, information
systems and renovated stores. Cash provided by financing
activities for fiscal year 2008 of $2.2 million relates to
net proceeds from the exercise of stock options (including the
related tax benefits).
Capital expenditures are expected to be approximately $33 to
$38 million in fiscal year 2011, primarily to fund the
anticipated opening of approximately 40 to 50 new stores, the
renovation
and/or
relocation of several stores, expansion of its distribution
center capacity and the implementation of various systems
projects.
The capital expenditures include the cost of the construction of
leasehold improvements for new stores and several stores to be
renovated or relocated, of which $5 to $7 million is
expected to be reimbursed through landlord contributions. These
amounts are typically paid by the landlords after the completion
of construction by the Company and the receipt of appropriate
lien waivers from contractors. For the stores opened and
renovated in fiscal year 2010, the Company negotiated
approximately $5.4 million of landlord contributions. The
table below summarizes the landlord contributions that were
negotiated and collected related to the stores opened in fiscal
year 2010 and fiscal year 2009.
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|
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Amounts
|
|
|
Amounts
|
|
|
Amounts
|
|
|
|
|
|
|
Collected in
|
|
|
Collected in
|
|
|
Outstanding
|
|
|
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Negotiated
|
|
|
Fiscal Year
|
|
|
Fiscal Year
|
|
|
January 29,
|
|
|
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Amounts
|
|
|
2009
|
|
|
2010
|
|
|
2011
|
|
|
|
|
|
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(In thousands)
|
|
|
|
|
|
Fiscal Year 2009 Store Openings (14 Stores)
|
|
$
|
2,829
|
|
|
$
|
2,170
|
|
|
$
|
659
|
|
|
$
|
|
|
Fiscal Year 2010 Store Openings (36 Stores)
|
|
|
5,382
|
|
|
|
|
|
|
|
2,599
|
|
|
|
2,783
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
8,211
|
|
|
$
|
2,170
|
|
|
$
|
3,258
|
|
|
$
|
2,783
|
|
|
|
|
|
|
|
|
|
|
|
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|
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The majority of the remaining balance of the landlord
contributions to be collected by the Company for the stores
opened and renovated in fiscal year 2010 is expected to be
received by the end of fiscal year 2011.
The Company expects total inventories to increase in fiscal year
2011 at a rate higher than experienced in recent years primarily
as a result of the replenishment of units sold in fiscal 2010,
new store openings, continued sales growth, higher inventory
sourcing costs and a larger buildup of core product inventory
levels in anticipation that future costs of products will
continue to remain at higher levels.
Management believes that the Companys cash from
operations, existing cash and cash equivalents and short-term
investments will be sufficient to fund its planned capital
expenditures and operating expenses through at least the next
12 months.
Off-Balance Sheet Arrangements The
Company has no off-balance sheet arrangements other than its
operating lease agreements.
Effects
of Inflation and Changing Prices
Inflation and changing prices could have a material adverse
impact on the Companys operations, financial condition and
results of operations, especially with respect to its product
costs which are largely driven by cotton and wool prices and
other production inputs such as labor costs which are largely
tied to the labor markets and economies of the various countries
in which the Companys vendors are located. In general, the
Company will attempt, over time, to increase prices to largely
counteract the increasing costs due to inflation. However there
is no assurance that the Companys customers will accept
such higher prices, especially over a short-term period.
34
Disclosures
about Contractual Obligations and Commercial
Commitments
The Companys principal commitments are non-cancelable
operating leases in connection with its retail stores, certain
tailoring facilities and equipment and inventory purchase
commitments. Under the terms of certain of the retail store
leases, the Company is required to pay a base annual rent, plus
a contingent amount based on sales (contingent
rent). In addition, many of these leases include scheduled
rent increases. Base annual rent and scheduled rent increases
are included in the contractual obligations table below for
operating leases, as these are the only rent-related commitments
that are determinable at this time.
The following table reflects a summary of the Companys
contractual cash obligations and other commercial commitments as
of January 29, 2011:
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Payments Due by Fiscal Year
|
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2011
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|
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2012-2014
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2015-2016
|
|
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Beyond 2016
|
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Total(f)
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|
|
|
(In thousands)
|
|
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Operating leases(a)(b)
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|
$
|
63,557
|
|
|
$
|
162,065
|
|
|
$
|
67,642
|
|
|
$
|
55,823
|
|
|
$
|
349,087
|
|
Inventory Purchase Commitments(c)
|
|
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344,240
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
344,240
|
|
Related Party Agreement(d)
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|
|
825
|
|
|
|
1,650
|
|
|
|
|
|
|
|
|
|
|
|
2,475
|
|
License agreement(e)
|
|
|
165
|
|
|
|
495
|
|
|
|
165
|
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|
|
|
|
|
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825
|
|
|
|
|
(a) |
|
Includes various lease agreements signed prior to
January 29, 2011 for stores to be opened and equipment
placed in service subsequent to January 29, 2011. (See
Note 9 to the Consolidated Financial Statements). |
|
(b) |
|
Excludes contingent rent and other lease costs. |
|
(c) |
|
Represents the value of expected future inventory purchases for
receipts out to the end of fiscal year 2011 for which purchase
orders have been issued or other commitments have been made to
vendors as of January 29, 2011. |
|
(d) |
|
Relates to consulting agreement with the Companys current
Chairman of the Board to consult on matters of strategic
planning and initiatives (See Note 13 in the Consolidated
Financial Statements). |
|
(e) |
|
Related to an agreement with David Leadbetter, a golf
professional, which allows the Company to produce golf and other
apparel under his name. |
|
(f) |
|
Obligations related to unrecognized tax benefits and related
penalties and interest of $0.8 million have been excluded
from the above table as the amount to be settled in cash and the
specific payment dates are not known. |
|
|
Item 7A.
|
QUANTITATIVE
AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
|
At fiscal year-end 2010, the Company was not a party to any
derivative financial instruments. The Company does business with
all of its product vendors in U.S. currency and does not
have direct foreign currency risk. However, a devaluation of the
U.S. dollar against the foreign currencies of its suppliers
could have a material adverse effect on the Companys
product costs and resulting gross profit. The Company currently
invests substantially all of its excess cash in short-term
investments, primarily in U.S. Treasury bills with
maturities of less than one year, overnight federally-sponsored
agency notes and money market accounts, where returns
effectively reflect current interest rates. As a result, market
interest rate changes may impact the Companys net interest
income or expense. The impact will depend on variables such as
the magnitude of rate changes and the level of borrowings or
excess cash balances. A 100 basis point change in interest
rates would have changed net interest income by approximately
$2.2 million in fiscal year 2010.
|
|
Item 8.
|
FINANCIAL
STATEMENTS AND SUPPLEMENTARY DATA.
|
Refer to pages F-1 to F-22 of this Annual Report on
Form 10-K,
which are incorporated herein by reference.
35
|
|
Item 9.
|
CHANGES
IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
|
None.
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|
Item 9A
|
CONTROLS
AND PROCEDURES.
|
Disclosure
Controls and Procedures and Changes in Internal Control Over
Financial Reporting
Limitations on Controls and
Procedures. Because of their inherent
limitations, disclosure controls and procedures and internal
control over financial reporting (collectively, Control
Systems) may not prevent or detect all failures or
misstatements of the type sought to be avoided by Control
Systems. Also, projections of any evaluation of the
effectiveness of the Companys Control Systems to future
periods are subject to the risk that controls may become
inadequate because of changes in conditions, or that the degree
of compliance with the policies or procedures may deteriorate.
Management, including the Companys Chief Executive Officer
(the CEO) and Chief Financial Officer (the
CFO), does not expect that the Companys
Control Systems will prevent all errors or all fraud. A Control
System, no matter how well conceived and operated, can provide
only reasonable, not absolute, assurance that the objectives of
the Control System are met. Further, the design of a Control
System must reflect the fact that there are resource
constraints, and the benefits of controls must be considered
relative to their costs. Because of the inherent limitations in
all Control Systems, no evaluation can provide absolute
assurance that all control issues and instances of fraud, if
any, within the Company have been detected. These reports by
management, including the CEO and CFO, on the effectiveness of
the Companys Control Systems express only reasonable
assurance of the conclusions reached.
Disclosure Controls and Procedures The
Company maintains disclosure controls and procedures that are
designed to ensure that information required to be disclosed in
the Companys reports under the Securities Exchange Act of
1934, as amended (the Exchange Act), is recorded,
processed, summarized, and reported within the time periods
specified in the SECs rules and forms, and that such
information is accumulated and communicated to management,
including the CEO and CFO, as appropriate, to allow timely
decisions regarding required disclosure.
Management, with the participation of the CEO and CFO, has
evaluated the effectiveness, as of January 29, 2011, of the
Companys disclosure controls and procedures (as defined in
Rules 13a-15(e)
and
15d-15(e)
under the Exchange Act). Based on that evaluation, the CEO and
CFO have concluded that the Companys disclosure controls
and procedures were effective as of January 29, 2011.
Managements Annual Report on Internal Control over
Financial Reporting Management is responsible
for establishing and maintaining adequate internal control over
financial reporting (as defined in
Rules 13a-15(f)
and
15d-15(f)
under the Exchange Act). Management, with the participation of
the CEO and CFO, has evaluated the effectiveness, as of
January 29, 2011, of the Companys internal control
over financial reporting. In making this evaluation, management
used the criteria set forth by the Committee of Sponsoring
Organizations of the Treadway Commission in its publication
Internal Control-Integrated Framework. Based on that
evaluation, the CEO and CFO have concluded that the
Companys internal control over financial reporting was
effective as of January 29, 2011.
Changes in Internal Control over Financial
Reporting There were no changes in the
Companys internal control over financial reporting
identified in connection with the evaluation required by
paragraph (d) of
Section 240.13a-15
of the Exchange Act that occurred during the Companys last
fiscal quarter (the Companys fourth quarter in the case of
an annual report) that have materially affected, or are
reasonably likely to materially affect, the Companys
internal control over financial reporting.
Attestation Report of the Registered Public Accounting
Firm The Companys independent registered
public accounting firm, Deloitte & Touche, LLP, has
issued the following attestation report on the effectiveness of
the Companys internal control over financial reporting:
36
REPORT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Stockholders of Jos. A. Bank
Clothiers, Inc.
Hampstead, Maryland
We have audited the internal control over financial reporting of
Jos. A. Bank Clothiers, Inc. and subsidiaries (the
Company) as of January 29, 2011, based on
criteria established in Internal Control
Integrated Framework issued by the Committee of Sponsoring
Organizations of the Treadway Commission. The Companys
management is responsible for maintaining effective internal
control over financial reporting and for its assessment of the
effectiveness of internal control over financial reporting,
included in the accompanying Managements Annual Report on
Internal Control over Financial Reporting. Our responsibility is
to express an opinion on the Companys internal control
over financial reporting based on our audit.
We conducted our audit in accordance with the standards of the
Public Company Accounting Oversight Board (United States). Those
standards require that we plan and perform the audit to obtain
reasonable assurance about whether effective internal control
over financial reporting was maintained in all material
respects. Our audit included obtaining an understanding of
internal control over financial reporting, assessing the risk
that a material weakness exists, testing and evaluating the
design and operating effectiveness of internal control based on
the assessed risk, and performing such other procedures as we
considered necessary in the circumstances. We believe that our
audit provides a reasonable basis for our opinion.
A companys internal control over financial reporting is a
process designed by, or under the supervision of, the
companys principal executive and principal financial
officers, or persons performing similar functions, and effected
by the companys board of directors, management, and other
personnel to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of
financial statements for external purposes in accordance with
generally accepted accounting principles. A companys
internal control over financial reporting includes those
policies and procedures that (1) pertain to the maintenance
of records that, in reasonable detail, accurately and fairly
reflect the transactions and dispositions of the assets of the
company; (2) provide reasonable assurance that transactions
are recorded as necessary to permit preparation of financial
statements in accordance with generally accepted accounting
principles, and that receipts and expenditures of the company
are being made only in accordance with authorizations of
management and directors of the company; and (3) provide
reasonable assurance regarding prevention or timely detection of
unauthorized acquisition, use, or disposition of the
companys assets that could have a material effect on the
financial statements.
Because of the inherent limitations of internal control over
financial reporting, including the possibility of collusion or
improper management override of controls, material misstatements
due to error or fraud may not be prevented or detected on a
timely basis. Also, projections of any evaluation of the
effectiveness of the internal control over financial reporting
to future periods are subject to the risk that the controls may
become inadequate because of changes in conditions, or that the
degree of compliance with the policies or procedures may
deteriorate.
In our opinion, the Company maintained, in all material
respects, effective internal control over financial reporting as
of January 29, 2011, based on the criteria established in
Internal Control Integrated Framework issued
by the Committee of Sponsoring Organizations of the Treadway
Commission.
We have also audited, in accordance with the standards of the
Public Company Accounting Oversight Board (United States), the
consolidated financial statements as of and for the year ended
January 29, 2011 of the Company and our report dated
March 30, 2011 expressed an unqualified opinion on those
financial statements.
DELOITTE &
TOUCHE LLP
Baltimore, Maryland
March 30, 2011
37
|
|
Item 9B.
|
OTHER
INFORMATION.
|
Award of
2010 Cash Incentive Payments
At its March 30, 2010 meeting, the Companys
Compensation Committee adopted a program for cash incentives for
fiscal year 2010 (the 2010 Cash Incentive Program)
under the Jos. A. Bank Clothiers, Inc. Executive Management
Incentive Plan (the Cash Incentive Plan). On
March 29, 2011, the Compensation Committee determined that
the following amounts are payable to the Companys
executive officers under the 2010 Cash Incentive Program: R.
Neal Black, President and Chief Executive Officer- $1,175,000;
Robert B. Hensley, Executive Vice President for Human Resources,
Real Estate and Loss Prevention- $318,500; Gary M. Merry,
Executive Vice President for Store and Catalog Operations-
$260,000; James W. Thorne- Executive Vice President for
Merchandising and Chief Merchandising Officer- $243,750; and
David E. Ullman-Executive Vice President and Chief Financial
Officer- $302,250. Messrs. Hensley, Merry, Thorne and
Ullman are herein referred to collectively as the
Executive Vice Presidents and together with
Mr. Black as the Executive Officers.
Certification
of 2010 Equity Incentive Grants
At its June 17, 2010 meeting, the Companys
Compensation Committee adopted a program for equity incentives
for fiscal year 2010 (the 2010 Equity Incentive
Program) under the Jos. A. Bank Clothiers, Inc. 2010
Equity Incentive Plan (the Equity Incentive Plan)
and granted to each of the Companys executive officers a
number of performance-based restricted stock units (the
Performance RSUs), subject to achievement of
specified performance goals. On March 29, 2011, the
Compensation Committee authorized, subject to the terms of each
executive officers Performance Restricted Stock Unit Award
Agreement and the terms of the Equity Incentive Plan, that
(i) 48,463 Performance RSUs be credited to Mr. Black,
19,512 of which will vest on June 17, 2011, 14,476 of which
will vest on June 17, 2012 and the remaining 14,475 of
which will vest on June 17, 2013; and (ii) 3,775
Performance RSUs, all of which will vest on June 17, 2013,
be credited to each of the Executive Vice Presidents.
2011
Incentive Programs
Cash
Incentive Program
On March 29, 2011, the Companys Compensation
Committee established for the Executive Officers a cash
incentive program for fiscal year 2011 (the 2011 Cash
Incentive Program) pursuant to the Cash Incentive Plan.
The 2011 Cash Incentive Program permits the Company to grant
performance-based compensation within the meaning of
Section 162(m) of the Internal Revenue Code, thereby
preserving the Companys ability to receive federal income
tax deductions for those awards to the extent that they in fact
comply with that Code section. If payable under the 2011 Cash
Incentive Program, award payments are expected to be paid in
cash.
The key performance goal under the 2011 Cash Incentive Program
is the Company earning net income within or above a specified
range (the Eligibility Range) in fiscal year 2011.
If the Companys net income in fiscal year 2011 is below
the Eligibility Range, an award payment cannot be authorized
under the 2011 Cash Incentive Program. If the Companys net
income is within the Eligibility Range, the percentage of the
award target which the Executive Officers are eligible to earn
increases as net income increases, up to 100% of the award
target. If the Companys net income is at or above the
highest level of net income within the Eligibility Range, each
Executive Officer is eligible to earn his maximum award target.
The Company earning net income within or above the Eligibility
Range is the only performance goal under the 2011 Cash Incentive
Program for Mr. Black. With respect to the Executive Vice
Presidents, the following personal goals may also be
considered and utilized by the Compensation Committee in its
exercise of negative discretion to reduce the amount of an award
that would otherwise have been payable at any particular level
of net income achieved by the Company: (a) the participant
receiving an overall job performance rating of
Effective or better (the equivalent of 3 out of 5);
(b) the participant complying with the Companys Code
of Conduct, Associate Handbook and other rules, regulations and
policies and not
38
engaging in any dishonest acts or other acts that are or may be
detrimental to customers, fellow associates or the Company; and
(c) the participant achieving specific goals for
departmental or individual performance.
For the 2011 Cash Incentive Program, the Eligibility Range for
Mr. Black is $85.5 million to $94.1 million of
net income and the Eligibility Range for the Executive Vice
Presidents is $88.5 million to $95.3 million of net
income. If the Company earns net income below the low end of the
applicable Eligibility Range, the Executive Officer will not
receive an award payment under this program. At
$85.5 million of net income, Mr. Black will be
eligible to receive up to 60% of his base salary; at
$88.5 million of net income, each Executive Vice President
will each be eligible to receive up to 10% of his base salary.
At or above $94.1 million of net income, Mr. Black
will be eligible to receive up to approximately 151.6% of his
base salary; at or above $95.3 million of net income, each
of the Executive Vice Presidents will be eligible to receive up
to 65% of their respective base salaries. Between the low and
high ends of the Eligibility Ranges, the percentage of base
salary which each participant will be eligible to receive will
increase as net income increases.
Equity
Incentive Programs
2011
Equity Incentive Program
On March 29, 2011, the Companys Compensation
Committee established for the Executive Officers an equity
incentive program for fiscal year 2011 (the 2011 Equity
Incentive Program) pursuant to the Equity Incentive Plan.
The 2011 Equity Incentive Program permits the Company to grant
performance-based compensation within the meaning of
Section 162(m) of the Internal Revenue Code, thereby
preserving the Companys ability to receive federal income
tax deductions for those awards to the extent that they in fact
comply with that Code section. If payable under the 2011 Equity
Incentive Program, award payments are expected to be paid in
Performance RSUs.
The performance goals under the 2011 Equity Incentive Program
are qualitatively the same as the performance goals under the
2011 Cash Incentive Program, i.e. such goals are based upon the
Company earning net income within or above an Eligibility Range
for fiscal year 2011 and, with respect to the Executive Vice
Presidents, personal goals as set forth above under 2011
Incentive Programs-Cash Incentive Program. However, the
levels of net income within the Eligibility Ranges for the 2011
Equity Incentive Program are higher than those established under
the 2011 Cash Incentive Program.
If the Companys net income is below the Eligibility Range
for the 2011 Equity Incentive Program, no Performance RSUs can
be earned under that program. If the Companys net income
is within the Eligibility Range, the number of Performance RSUs
which the Executive Officers are eligible to earn increases as
net income increases, up to 100% of the award target. If the
Companys net income is at or above the highest level of
net income within the Eligibility Range, each Executive Officer
is eligible to earn his maximum award target.
For the 2011 Equity Incentive Program, the Compensation
Committee established for Mr. Black an Eligibility Range of
$90.7 million to $94.1 million of net income and for
the Executive Vice Presidents an Eligibility Range of
$94.5 million to $96.2 million of net income. If the
Company earns net income below the low end of the Eligibility
Range, the applicable participant cannot earn Performance RSUs
under this program. At $90.7 million of net income,
Mr. Black will be eligible to earn up to a value of
$897,715 of Performance RSUs; at $94.5 million of net
income, each of the Executive Vice Presidents will be eligible
to earn up to a value of $50,000 of Performance RSUs. At or
above $94.1 million of net income, Mr. Black will be
eligible to earn up to a value of $1,965,425 of Performance
RSUs; at or above $96.2 million of net income, each of the
Executive Vice Presidents will be eligible to earn up to a value
of $150,000 of Performance RSUs. Between the low and high ends
of the Eligibility Ranges, the value of Performance RSUs which
each participant will be eligible to earn will increase as net
income increases. The value of the Performance RSUs,
and the number of Performance RSUs to be granted, will be
determined by reference to the closing price of the
Companys stock on March 29, 2011.
39
2011
Supplemental Equity Incentive Program
As a special incentive to the Executive Officers to achieve
extraordinary results in fiscal year 2011, on March 29,
2011, the Companys Compensation Committee established for
the Executive Officers a supplemental equity incentive program
for fiscal year 2011 (the 2011 Supplemental Equity
Incentive Program) pursuant to the Equity Incentive Plan.
The 2011 Supplemental Equity Incentive Program permits the
Company to grant performance-based compensation
within the meaning of Section 162(m) of the Internal
Revenue Code, thereby preserving the Companys ability to
receive federal income tax deductions for those awards to the
extent that they in fact comply with that Code section. If
payable under the 2011 Supplemental Equity Incentive Program,
award payments are expected to be paid in Performance RSUs.
The performance goals under the 2011 Supplemental Equity
Incentive Program are very similar to the performance goals
under the 2011 Cash Incentive Program and the 2011 Equity
Incentive Plan, i.e. such goals are based upon the Company
earning a certain amount net income for fiscal year 2011 and,
with respect to the Executive Vice Presidents, personal goals as
set forth above under 2011 Incentive Programs-Cash
Incentive Program. However, instead of being based upon
Eligibility Ranges of net income, the 2011 Supplemental Equity
Incentive Program is based on a single level of net income. In
the event the Company earns at least $103.0 million of net
income in fiscal year 2011, Mr. Black will be eligible to
earn up to a value of $250,000 of Performance RSUs and each of
the Executive Vice Presidents will be eligible to earn up to a
value of $50,000 of Performance RSUs. The value of
the Performance RSUs, and the number of Performance RSUs to be
granted, will be determined by reference to the closing price of
the Companys stock on March 29, 2011.
Negative
Discretion
For each of the 2011 Incentive Programs (i.e., the 2011 Cash
Incentive Program, the 2011 Equity Incentive Program and the
2011 Supplemental Equity Incentive Program), the Compensation
Committee may exercise negative discretion to reduce the amount
of a cash award that otherwise would have been payable to, or to
reduce the number of Performance RSUs that would otherwise have
been earned by, an Executive Officer at any particular level of
net income achieved by the Company, even if the Companys
net income is within or above the applicable Eligibility Range
or level. In deciding whether, and to what extent, to pay a cash
award to, or to certify the earning of Performance RSUs by, an
Executive Vice President, an important factor which may be
considered by the Compensation Committee in exercising its
negative discretion is Mr. Blacks evaluation of the
individual performance of each Executive Vice President.
Generally, Mr. Black makes his recommendation based upon
his evaluation of the Executive Vice Presidents individual
contributions to the performance of the Company and such other
factors as he may deem relevant. The final determination of the
amount of a cash award that will be paid to, or the number of
Performance RSUs that will be earned by, each Executive Officer
is made by the Compensation Committee; however, the Compensation
Committee may not increase the cash award payable to, or the
number of Performance RSUs which will be earned by, an Executive
Officer above the amount or number that is otherwise applicable
at any particular level of net income achieved by the Company.
Employment
Contract Amendments
On March 29, 2011, the Companys Compensation
Committee amended the employment agreements of each of its
executive vice presidents and senior vice presidents, extending
the terms through February 2, 2013
and/or
adjusting the annual base salaries for the 2011 fiscal year.
These amendments are attached as Exhibits 10.3(e), 10.5(c),
10.6(e), 10.8(g), 10.10(a) and 10.11(d), to this Annual Report
on
Form 10-K.
PART III
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Item 10.
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DIRECTORS,
EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.
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The disclosure required under Item 10, other than the
following information concerning the Companys code of
ethics, is omitted by the Company in accordance with General
Instruction G to
Form 10-K.
The Company will disclose the information required under this
item either by (a) incorporating the information by
40
reference from the Companys definitive proxy statement
under the sections entitled Proposal One
Election of Directors, Executive Compensation and
Related Information and Section 16(a)
Beneficial Ownership Reporting Compliance if filed by
May 30, 2011 (the first business day following
120 days from the close of fiscal year-end 2010) or
(b) filing an amendment to this
Form 10-K
which contains the required information by May 30, 2011.
The Company has adopted a code of ethics as defined
by applicable rules of the Securities and Exchange Commission
and the NASDAQ Stock Market, which is applicable to, among
others, its chief executive officer, chief financial officer,
principal accounting officer and other senior financial and
reporting persons and its directors. If the Company makes any
amendments to the code of ethics for its senior officers,
financial and reporting persons or directors (other than
technical, administrative, or other non-substantive amendments),
or grants any waivers, including implicit waivers, from a
provision of this code to such persons, the Company will
disclose the nature of the amendment or waiver, its effective
date and to whom it applies on its website or in a report on
Form 8-K
filed with the Securities and Exchange Commission. The Company
has posted its code of ethics on its Internet website at
www.josbank.com.
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|
Item 11.
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EXECUTIVE
COMPENSATION.
|
The disclosure required under Item 11 is omitted by the
Company in accordance with General Instruction G to
Form 10-K.
The Company will disclose the information required under this
item either by (a) incorporating the information by
reference from the Companys definitive proxy statement
under the sections entitled Compensation Discussion and
Analysis, Compensation Committee Report,
Executive Compensation and Compensation
Committee Interlocks and Insider Participation if filed by
May 30, 2011 or (b) filing an amendment to this
Form 10-K
which contains the required information by May 30, 2011.
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Item 12.
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SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED STOCKHOLDER MATTERS.
|
The disclosure required under Item 12 is omitted by the
Company in accordance with General Instruction G to
Form 10-K.
The Company will disclose the information required under this
item either by (a) incorporating the information by
reference from the Companys definitive proxy statement
under the sections entitled Security Ownership of Certain
Beneficial Owners and Management and Equity
Compensation Plan Information if filed by May 30,
2011 or (b) filing an amendment to this
Form 10-K
which contains the required information by May 30, 2011.
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|
Item 13.
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CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
INDEPENDENCE.
|
The disclosure required under Item 13 is omitted by the
Company in accordance with General Instruction G to
Form 10-K.
The Company will disclose the information required under this
item either by (a) incorporating the information by
reference from the Companys definitive proxy statement
under the sections entitled Transactions with Related
Persons and Proposal One Election
of Directors if filed by May 30, 2011 or
(b) filing an amendment to this
Form 10-K
which contains the required information by May 30, 2011.
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Item 14.
|
PRINCIPAL
ACCOUNTING FEES AND SERVICES.
|
The disclosure required under Item 14 is omitted by the
Company in accordance with General Instruction G to
Form 10-K.
The Company will disclose the information required under this
item either by (a) incorporating the information by
reference from the Companys definitive proxy statement
under the section entitled Proposal Two
Ratification of Registered Public Accounting Firm if filed
by May 30, 2011 or (b) filing an amendment to this
Form 10-K
which contains the required information by May 30, 2011.
41
PART IV
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Item 15.
|
EXHIBITS,
FINANCIAL STATEMENTS SCHEDULES.
|
(a) (1) List of Financial Statements
The following Consolidated Financial Statements of Jos. A. Bank
Clothiers, Inc. and the related notes are filed as part of this
Annual Report pursuant to Item 8:
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Page
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F-1
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F-2
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F-3
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F-4
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F-5
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F-6
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(a) (2) List of Financial Statement Schedules
All required information is included within the Consolidated
Financial Statements and the notes thereto.
(a) (3) List of Exhibits
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3.1
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Certificate of Amendment of the Restated Certificate of
Incorporation of the Company and the Restated Certificate of
Incorporation of the Company.*(9)
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3.2
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Amended and Restated By-Laws of the Company as of February 24,
2011.*(23)
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4.1
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Form of Common Stock certificate.*(1)
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4.2
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Rights Agreement, dated as of September 6, 2007, including
Exhibit B thereto (the form of Right Certificate).*(10)
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4.3
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Certificate Eliminating Reference to Series A Preferred Stock
from Restated Certificate of Incorporation of Company.*(11)
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4.4
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Certificate of Designation of Series A Junior Participating
Preferred Stock.*(11)
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10.1
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1994 Incentive Plan.*(1)
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10.1(a)
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Amendments, dated as of October 6, 1997, to Incentive
Plan.*(2)
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10.2
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|
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Summary of 2010 and 2011 Cash and Equity Incentive
Programs.*(24)
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10.3
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Amended and Restated Employment Agreement, dated as of May 15,
2002, between David E. Ullman and Jos. A. Bank Clothiers,
Inc.*(5)
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10.3(a)
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Fifth Amendment, dated as of April 9, 2008, to Amended and
Restated Employment Agreement, dated as of May 15, 2002, by and
between David E. Ullman and Jos. A. Bank Clothiers,
Inc.*(12)
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10.3(b)
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Sixth Amendment, dated as of April 7, 2009, to Amended and
Restated Employment Agreement, dated as of May 15, 2002, by and
between David E. Ullman and Jos. A. Bank Clothiers,
Inc.*(15)
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10.3(c)
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Seventh Amendment, dated as of March 30, 2010, to Amended and
Restated Employment Agreement, dated as of May 15, 2002, by and
between David E. Ullman and Jos. A. Bank Clothiers,
Inc.*(18)
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10.3(d)
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Eighth Amendment, dated as of December 28, 2010, to Amended and
Restated Employment Agreement, dated as of May 15, 2002, by and
between David E. Ullman and Jos. A. Bank Clothiers,
Inc.*(22)
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42
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10.3(e)
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Ninth Amendment, dated as of March 29, 2011, to Amended and
Restated Employment Agreement, dated as of May 15, 2002, by and
between David E. Ullman and Jos. A. Bank Clothiers,
Inc.*(24)
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10.4
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Jos. A. Bank Clothiers, Inc. Nonqualified Deferred Compensation
Trust Agreement, dated January 20, 2004.*(8)
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10.5
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Employment Agreement, dated as of January 30, 2009, between
James W. Thorne and Jos. A. Bank Clothiers, Inc.*(15)
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10.5(a)
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First Amendment, dated as of March 30, 2010, to Employment
Agreement dated as of January 30, 2009, between James W. Thorne
and Jos. A. Bank Clothiers, Inc.*(18)
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10.5(b)
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Second Amendment, dated as of December 28, 2010, to Employment
Agreement dated as of January 30, 2009, between James W. Thorne
and Jos. A. Bank Clothiers, Inc.*(22)
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10.5(c)
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Third Amendment, dated as of March 29, 2011, to Employment
Agreement dated as of January 30, 2009, between James W. Thorne
and Jos. A. Bank Clothiers, Inc.*(24)
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10.6
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Amended and Restated Employment Agreement, dated May 15, 2002,
by and between Charles D. Frazer and Jos. A. Bank Clothiers,
Inc.*(5)
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10.6(a)
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Fifth Amendment, dated as of April 9, 2008, to Amended and
Restated Employment Agreement, dated as of May 15, 2002, by and
between Charles D. Frazer and Jos. A. Bank Clothiers,
Inc.*(12)
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10.6(b)
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|
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Sixth Amendment, dated as of April 7, 2009, to Amended and
Restated Employment Agreement, dated as of May 15, 2002, by and
between Charles D. Frazer and Jos. A. Bank Clothiers,
Inc.*(15)
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10.6(c)
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|
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Seventh Amendment, dated as of June 17, 2010, to Amended and
Restated Employment Agreement, dated as of May 15, 2002, by and
between Charles D. Frazer and Jos. A. Bank Clothiers,
Inc.*(20)
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10.6(d)
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Eighth Amendment, dated as of December 28, 2010, to Amended and
Restated Employment Agreement, dated as of May 15, 2002, by and
between Charles D. Frazer and Jos. A. Bank Clothiers,
Inc.*(22)
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10.6(e)
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|
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Ninth Amendment, dated as of March 29, 2011, to Amended and
Restated Employment Agreement, dated as of May 15, 2002, by and
between Charles D. Frazer and Jos. A. Bank Clothiers,
Inc.*(24)
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10.7
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|
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Employment Agreement, dated as of November 1, 1999, between
Robert N. Wildrick and Jos. A. Bank Clothiers,
Inc.*(3)
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10.7(a)
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Fourth Amendment, dated as of September 9, 2008, to Employment
Agreement, dated as of November 1, 1999, by and between Robert
N. Wildrick and Jos. A. Bank Clothiers, Inc.*(14)
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10.7(b)
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Consulting Agreement, dated as of September 9, 2008, between
Robert N. Wildrick and Jos. A. Bank Clothiers,
Inc.*(14)
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10.7(c)
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First Amendment, dated as of November 30, 2010, to Consulting
Agreement, dated as of September 9, 2008, between Robert N.
Wildrick and Jos. A. Bank Clothiers, Inc.*(21)
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10.8
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Employment Agreement, dated as of November 30, 1999, by and
between Robert Hensley and Jos. A. Bank Clothiers, Inc.*(3)
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10.8(a)
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First Amendment, dated as of January 1, 2000, to Employment
Agreement, dated as of November 30, 1999, by and between Robert
Hensley and Jos. A. Bank Clothiers, Inc.*(4)
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10.8(b)
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|
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Fourth Amendment, dated as of May 28, 2002, to Employment
Agreement, dated as of November 30, 1999, by and between Robert
Hensley and Jos. A. Bank Clothiers, Inc.*(5)
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10.8(c)
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|
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Ninth Amendment, dated as of April 9, 2008, to Employment
Agreement, dated as of November 30, 1999, by and between Robert
Hensley and Jos. A. Bank Clothiers, Inc.*(12)
|
10.8(d)
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Tenth Amendment, dated as of April 7, 2009, to Employment
Agreement, dated as of November 30, 1999, by and between Robert
Hensley and Jos. A. Bank Clothiers, Inc.*(15)
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10.8(e)
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Eleventh Amendment, dated as of March 30, 2010, to Employment
Agreement, dated as of November 30, 1999, by and between Robert
Hensley and Jos. A. Bank Clothiers, Inc.*(18)
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43
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10.8(f)
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Twelfth Amendment, dated as of December 28, 2010, to Employment
Agreement, dated as of November 30, 1999, by and between Robert
Hensley and Jos. A. Bank Clothiers, Inc.*(22)
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10.8(g)
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Thirteenth Amendment, dated as of March 29, 2011, to Employment
Agreement, dated as of November 30, 1999, by and between Robert
Hensley and Jos. A. Bank Clothiers, Inc.*(24)
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10.9
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|
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Amended and Restated Employment Agreement, dated as of August
30, 2010, by and between R. Neal Black and Jos. A. Bank
Clothiers, Inc.*(20)
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10.10
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Employment offer letter, dated November 20, 2000, from Jos. A.
Bank Clothiers, Inc. to Jerry DeBoer.*(4)
|
10.10(a)
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Written description of 2011 base salary for Jerry
DeBoer.*(24)
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10.10(b)
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Amendment to Employment Offer Letter, dated as of December 28,
2010, by and between Jerry DeBoer and Jos. A. Bank Clothiers,
Inc.*(22)
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10.11
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Employment Agreement, dated as of June 3, 2008, between Gary
Merry and Jos. A. Bank Clothiers, Inc.*(13)
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10.11(a)
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First Amendment, dated as of April 7, 2009 to Employment
Agreement, dated as of June 3, 2008, by and between Gary Merry
and Jos. A. Bank Clothiers, Inc.*(15)
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10.11(b)
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Second Amendment, dated as of March 30, 2010 to Employment
Agreement, dated as of June 3, 2008, by and between Gary Merry
and Jos. A. Bank Clothiers, Inc.*(18)
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10.11(c)
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Third Amendment, dated as of December 28, 2010 to Employment
Agreement, dated as of June 3, 2008, by and between Gary Merry
and Jos. A. Bank Clothiers, Inc.*(22)
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10.11(d)
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Fourth Amendment, dated as of March 29, 2011 to Employment
Agreement, dated as of June 3, 2008, by and between Gary
Merry and Jos. A. Bank Clothiers, Inc.*(24)
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10.12
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2002 Long-Term Incentive Plan.*(6)
|
10.13
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|
|
|
Form of stock option agreement under the 2002 Long-Term
Incentive Plan.*(7)
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10.14
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|
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Collective Bargaining Agreement, dated March 1, 2009, by and
between Joseph A. Bank Mfg. Co., Inc. and Mid-Atlantic Regional
Joint Board, Local 806.*(18)
|
10.15
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|
|
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Form of Officer and Director Indemnification
Agreement.*(17)
|
10.15(a)
|
|
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Indemnification Agreement dated September 1, 2009 between JoS.
A. Bank Clothiers, Inc. and Robert N. Wildrick.*(17)
|
10.15(b)
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Indemnification Agreement dated September 1, 2009 between JoS.
A. Bank Clothiers, Inc. and Andrew A. Giordano.*(17)
|
10.15(c)
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|
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Indemnification Agreement dated September 1, 2009 between JoS.
A. Bank Clothiers, Inc. and R. Neal Black.*(17)
|
10.15(d)
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Indemnification Agreement dated September 1, 2009 between JoS.
A. Bank Clothiers, Inc. and James H. Ferstl.*(17)
|
10.15(e)
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Indemnification Agreement dated September 1, 2009 between JoS.
A. Bank Clothiers, Inc. and Gary S. Gladstein.*(17)
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10.15(f)
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Indemnification Agreement dated September 1, 2009 between JoS.
A. Bank Clothiers, Inc. and William E. Herron.*(17)
|
10.15(g)
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|
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Indemnification Agreement dated September 1, 2009 between JoS.
A. Bank Clothiers, Inc. and Henry Homes, III.*(17)
|
10.15(h)
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Indemnification Agreement dated September 1, 2009 between JoS.
A. Bank Clothiers, Inc. and Sidney H. Ritman.*(17)
|
10.15(i)
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|
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Indemnification Agreement dated September 1, 2009 between JoS.
A. Bank Clothiers, Inc. and David E. Ullman.*(17)
|
10.15(j)
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Indemnification Agreement dated August 30, 2010 between JoS. A.
Bank Clothiers, Inc. and Robert Hensley.*(20)
|
10.15(k)
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Indemnification Agreement dated August 30, 2010 between JoS. A.
Bank Clothiers, Inc. and Charles D. Frazer.*(20)
|
10.16
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JoS. A. Bank Clothiers, Inc. Executive Management Incentive
Plan.*(16)
|
10.16(a)
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Amendment to JoS. A. Bank Clothiers, Inc. Executive Management
Incentive Plan.*(18)
|
44
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10.17
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|
JoS. A. Bank Clothiers, Inc. 2010 Deferred Compensation
Plan.*(18)
|
10.18
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JoS. A. Bank Clothiers, Inc. 2010 Equity Incentive
Plan.*(18)
|
10.19
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JoS. A. Bank Clothiers, Inc. 2010 Equity Incentive
Plan CEO Performance Restricted Stock Unit Award
Agreement, dated June 17, 2010, by and between JoS. A. Bank
Clothiers, Inc. and R. Neal Black.*(19)
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10.20
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JoS. A. Bank Clothiers, Inc. 2010 Equity Incentive
Plan EVP Performance Restricted Stock Unit Award
Agreement.*(19)
|
10.21
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|
JoS. A. Bank Clothiers, Inc. 2010 Equity Incentive
Plan Non-Employee Director Restricted Stock Unit
2010 Award Agreement.*(19)
|
10.22
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JoS. A. Bank Clothiers, Inc. 2010 Equity Incentive
Plan Non-Employee Director Restricted Stock Unit
Annual Award Agreement.*(19)
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10.23
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JoS. A. Bank Clothiers, Inc. 2010 Equity Incentive
Plan Non-Employee Director Restricted Stock Unit
Inaugural Award Agreement.*(19)
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21.1
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Company subsidiaries.*(24)
|
23.1
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Consent of Deloitte & Touche LLP.*(24)
|
31.1
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|
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Certification of Principal Executive Officer Pursuant to Section
302 of the Sarbanes-Oxley Act of 2002.*(24)
|
31.2
|
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Certification of Principal Financial Officer Pursuant to Section
302 of the Sarbanes-Oxley Act of 2002.*(24)
|
32.1
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Certification of Principal Executive Officer Pursuant to Section
906 of the Sarbanes-Oxley Act of 2002.*(24)
|
32.2
|
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Certification of Principal Financial Officer Pursuant to Section
906 of the Sarbanes-Oxley Act of 2002.*(24)
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*(1)
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Incorporated by reference to the Companys Registration
Statement on Form S-1 filed May 3, 1994.
|
*(2)
|
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Incorporated by reference to the Companys Annual Report on
Form 10-K for the year ended January 31, 1998.
|
*(3)
|
|
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Incorporated by reference to the Companys Quarterly Report
on Form 10-Q for the quarter ended October 30, 1999.
|
*(4)
|
|
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Incorporated by reference to the Companys Annual Report on
Form 10-K for the year ended February 3, 2001.
|
*(5)
|
|
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Incorporated by reference to the Companys Quarterly Report
on Form 10-Q for the quarter ended May 4, 2002.
|
*(6)
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Incorporated by reference to the Companys Definitive Proxy
Statement on Schedule 14(A) filed May 20, 2002.
|
*(7)
|
|
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Incorporated by reference to the Companys Current Report
on Form 8-K, dated April 7, 2005.
|
*(8)
|
|
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|
Incorporated by reference to the Companys Annual Report on
Form 10-K for the year ended January 29, 2005.
|
*(9)
|
|
|
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Incorporated by reference to Amendment No. 1 to the
Companys Quarterly Report on Form 10-Q for the quarter
ended July 29, 2006.
|
*(10)
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|
|
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Incorporated by reference to the Companys Current Report
on Form 8-K, dated September 6, 2007.
|
*(11)
|
|
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Incorporated by reference to the Companys Current Report
on Form 8-K, dated September 20, 2007.
|
*(12)
|
|
|
|
Incorporated by reference to the Companys Annual Report on
Form 10-K for the year ended February 2, 2008.
|
*(13)
|
|
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Incorporated by reference to the Companys Quarterly Report
on Form 10-Q for the quarter ended May 3, 2008.
|
45
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*(14)
|
|
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|
Incorporated by reference to the Companys Current Report
on Form 8-K, dated September 9, 2008.
|
*(15)
|
|
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Incorporated by reference to the Companys Annual Report on
Form 10-K for the year ended January 31, 2009.
|
*(16)
|
|
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Incorporated by reference to the Companys Current Report
on Form 8-K, dated June 18, 2009.
|
*(17)
|
|
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Incorporated by reference to the Companys Quarterly Report
on Form 10-Q for the quarter ended August 1, 2009.
|
*(18)
|
|
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Incorporated by reference to the Companys Annual Report on
Form 10-K for the year ended January 30, 2010.
|
*(19)
|
|
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Incorporated by reference to the Companys Current Report
on Form 8-K, dated June 17, 2010.
|
*(20)
|
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Incorporated by reference to the Companys Quarterly Report
on Form 10-Q for the quarter ended July 31, 2010.
|
*(21)
|
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Incorporated by reference to the Companys Quarterly Report
on Form 10-Q for the quarter ended October 30, 2010.
|
*(22)
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Incorporated by reference to the Companys Current Report
on Form 8-K, dated December 28, 2010.
|
*(23)
|
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Incorporated by reference to the Companys Current Report
on Form 8-K, dated March 2, 2011.
|
*(24)
|
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Filed herewith
|
|
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|
|
Exhibit represents a management contract or compensatory plan or
arrangement.
|
46
REPORT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Stockholders of Jos. A. Bank
Clothiers, Inc.
Hampstead, Maryland
We have audited the accompanying consolidated balance sheets of
Jos. A. Bank Clothiers, Inc. and subsidiaries (the
Company) as of January 30, 2010 and
January 29, 2011 and the related consolidated statements of
income, stockholders equity, and cash flows for each of
the three years in the period ended January 29, 2011. These
financial statements are the responsibility of the
Companys management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with the standards of the
Public Company Accounting Oversight Board (United States). Those
standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by
management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, such consolidated financial statements present
fairly, in all material respects, the financial position of Jos.
A. Bank Clothiers, Inc. and subsidiaries as of January 30,
2010 and January 29, 2011, and the results of their
operations and their cash flows for each of the three years in
the period ended January 29, 2011, in conformity with
accounting principles generally accepted in the United States of
America.
We have also audited, in accordance with the standards of the
Public Company Accounting Oversight Board (United States), the
Companys internal control over financial reporting as of
January 29, 2011, based on the criteria established in
Internal Control Integrated Framework issued
by the Committee of Sponsoring Organizations of the Treadway
Commission and our report dated March 30, 2011 expressed an
unqualified opinion on the Companys internal control over
financial reporting.
DELOITTE &
TOUCHE LLP
Baltimore, MD
March 30, 2011
F-1
JOS. A.
BANK CLOTHIERS, INC.
AS OF JANUARY 30, 2010 AND JANUARY 29,
2011
|
|
|
|
|
|
|
|
|
|
|
January 30,
|
|
|
January 29,
|
|
|
|
2010
|
|
|
2011
|
|
|
|
(In thousands, except share information)
|
|
|
ASSETS
|
CURRENT ASSETS:
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
21,853
|
|
|
$
|
80,979
|
|
Short-term investments
|
|
|
169,736
|
|
|
|
189,789
|
|
Accounts receivable, net
|
|
|
5,860
|
|
|
|
9,525
|
|
Inventories
|
|
|
218,321
|
|
|
|
233,310
|
|
Prepaid expenses and other current assets
|
|
|
16,035
|
|
|
|
19,494
|
|
|
|
|
|
|
|
|
|
|
Total current assets
|
|
|
431,805
|
|
|
|
533,097
|
|
NONCURRENT ASSETS:
|
|
|
|
|
|
|
|
|
Property, plant and equipment, net
|
|
|
124,139
|
|
|
|
128,603
|
|
Other noncurrent assets
|
|
|
420
|
|
|
|
337
|
|
|
|
|
|
|
|
|
|
|
Total assets
|
|
$
|
556,364
|
|
|
$
|
662,037
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS EQUITY
|
CURRENT LIABILITIES:
|
|
|
|
|
|
|
|
|
Accounts payable
|
|
$
|
18,225
|
|
|
$
|
31,505
|
|
Accrued expenses
|
|
|
85,256
|
|
|
|
88,165
|
|
Deferred tax liability current
|
|
|
5,064
|
|
|
|
5,276
|
|
|
|
|
|
|
|
|
|
|
Total current liabilities
|
|
|
108,545
|
|
|
|
124,946
|
|
NONCURRENT LIABILITIES:
|
|
|
|
|
|
|
|
|
Long-term debt
|
|
|
|
|
|
|
|
|
Deferred rent
|
|
|
51,853
|
|
|
|
49,279
|
|
Deferred tax liability noncurrent
|
|
|
1,608
|
|
|
|
4,147
|
|
Other noncurrent liabilities
|
|
|
1,048
|
|
|
|
989
|
|
|
|
|
|
|
|
|
|
|
Total liabilities
|
|
|
163,054
|
|
|
|
179,361
|
|
|
|
|
|
|
|
|
|
|
COMMITMENTS AND CONTINGENCIES
|
|
|
|
|
|
|
|
|
STOCKHOLDERS EQUITY:
|
|
|
|
|
|
|
|
|
Preferred stock, $1.00 par, 500,000 shares authorized,
none issued or outstanding
|
|
|
|
|
|
|
|
|
Common stock, $.01 par, 45,000,000 shares authorized,
27,526,744 issued and outstanding at January 30, 2010 and
27,622,054 issued and outstanding at January 29, 2011
|
|
|
183
|
|
|
|
275
|
|
Additional paid-in capital
|
|
|
83,249
|
|
|
|
86,792
|
|
Retained earnings
|
|
|
309,823
|
|
|
|
395,531
|
|
Accumulated other comprehensive gains
|
|
|
55
|
|
|
|
78
|
|
|
|
|
|
|
|
|
|
|
Total stockholders equity
|
|
|
393,310
|
|
|
|
482,676
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and stockholders equity
|
|
$
|
556,364
|
|
|
$
|
662,037
|
|
|
|
|
|
|
|
|
|
|
The accompanying notes are an integral part of these
consolidated financial statements.
F-2
JOS. A.
BANK CLOTHIERS, INC.
FOR
THE YEARS ENDED JANUARY 31, 2009, JANUARY 30, 2010 and JANUARY
29, 2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fiscal Year
|
|
|
|
2008
|
|
|
2009
|
|
|
2010
|
|
|
|
(In thousands, except per share information)
|
|
|
NET SALES
|
|
$
|
695,908
|
|
|
$
|
770,316
|
|
|
$
|
858,128
|
|
Cost of goods sold
|
|
|
264,954
|
|
|
|
298,193
|
|
|
|
320,585
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GROSS PROFIT
|
|
|
430,954
|
|
|
|
472,123
|
|
|
|
537,543
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING EXPENSES:
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales and marketing, including occupancy costs
|
|
|
277,354
|
|
|
|
293,663
|
|
|
|
326,464
|
|
General and administrative
|
|
|
58,111
|
|
|
|
61,057
|
|
|
|
69,472
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating expenses
|
|
|
335,465
|
|
|
|
354,720
|
|
|
|
395,936
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING INCOME
|
|
|
95,489
|
|
|
|
117,403
|
|
|
|
141,607
|
|
OTHER INCOME (EXPENSE):
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income
|
|
|
856
|
|
|
|
375
|
|
|
|
589
|
|
Interest expense
|
|
|
(379
|
)
|
|
|
(395
|
)
|
|
|
(136
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total other income (expense)
|
|
|
477
|
|
|
|
(20
|
)
|
|
|
453
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before provision for income taxes
|
|
|
95,966
|
|
|
|
117,383
|
|
|
|
142,060
|
|
Provision for income taxes
|
|
|
37,558
|
|
|
|
46,228
|
|
|
|
56,261
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET INCOME
|
|
$
|
58,408
|
|
|
$
|
71,155
|
|
|
$
|
85,799
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PER SHARE INFORMATION
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
2.14
|
|
|
$
|
2.59
|
|
|
$
|
3.11
|
|
Diluted
|
|
$
|
2.11
|
|
|
$
|
2.56
|
|
|
$
|
3.08
|
|
Weighted average shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
27,321
|
|
|
|
27,452
|
|
|
|
27,553
|
|
Diluted
|
|
|
27,668
|
|
|
|
27,785
|
|
|
|
27,851
|
|
The accompanying notes are an integral part of these
consolidated financial statements.
F-3
JOS. A.
BANK CLOTHIERS, INC.
FOR
THE YEARS ENDED JANUARY 31, 2009, JANUARY 30, 2010 AND JANUARY
29, 2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated
|
|
|
|
|
|
|
|
|
|
|
|
|
Additional
|
|
|
|
|
|
Other
|
|
|
Total
|
|
|
|
Shares of
|
|
|
Common
|
|
|
Paid-In
|
|
|
Retained
|
|
|
Comprehensive
|
|
|
Stockholders
|
|
|
|
Common Stock
|
|
|
Stock
|
|
|
Capital
|
|
|
Earnings
|
|
|
(Losses) Gains
|
|
|
Equity
|
|
|
|
(In thousands, except share information)
|
|
|
BALANCE, FEBRUARY 2, 2008
|
|
|
27,269,057
|
|
|
$
|
181
|
|
|
$
|
80,791
|
|
|
$
|
180,260
|
|
|
$
|
(67
|
)
|
|
$
|
261,165
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
58,408
|
|
|
|
|
|
|
|
58,408
|
|
Adjustment to minimum pension liability, net of tax effect of $50
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
79
|
|
|
|
79
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
58,487
|
|
Issuance of common stock pursuant to Incentive Option Plan
|
|
|
167,409
|
|
|
|
1
|
|
|
|
1,535
|
|
|
|
|
|
|
|
|
|
|
|
1,536
|
|
Income tax benefit from exercise of non-qualified stock options
|
|
|
|
|
|
|
|
|
|
|
625
|
|
|
|
|
|
|
|
|
|
|
|
625
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BALANCE, JANUARY 31, 2009
|
|
|
27,436,466
|
|
|
|
182
|
|
|
|
82,951
|
|
|
|
238,668
|
|
|
|
12
|
|
|
|
321,813
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
71,155
|
|
|
|
|
|
|
|
71,155
|
|
Adjustment to minimum pension liability, net of tax effect of $30
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
43
|
|
|
|
43
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
71,198
|
|
Issuance of common stock pursuant to Incentive Option Plan
|
|
|
90,278
|
|
|
|
1
|
|
|
|
233
|
|
|
|
|
|
|
|
|
|
|
|
234
|
|
Income tax benefit from exercise of non-qualified stock options
|
|
|
|
|
|
|
|
|
|
|
65
|
|
|
|
|
|
|
|
|
|
|
|
65
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BALANCE, JANUARY 30, 2010
|
|
|
27,526,744
|
|
|
|
183
|
|
|
|
83,249
|
|
|
|
309,823
|
|
|
|
55
|
|
|
|
393,310
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
85,799
|
|
|
|
|
|
|
|
85,799
|
|
Adjustment to minimum pension liability, net of tax effect of $8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
23
|
|
|
|
23
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
85,822
|
|
Stock dividend transfer of par value
|
|
|
|
|
|
|
91
|
|
|
|
|
|
|
|
(91
|
)
|
|
|
|
|
|
|
|
|
Fractional share payments
|
|
|
(542
|
)
|
|
|
|
|
|
|
(21
|
)
|
|
|
|
|
|
|
|
|
|
|
(21
|
)
|
Equity compensation
|
|
|
|
|
|
|
|
|
|
|
1,252
|
|
|
|
|
|
|
|
|
|
|
|
1,252
|
|
Issuance of common stock pursuant to Incentive Option Plan
|
|
|
95,852
|
|
|
|
1
|
|
|
|
1,012
|
|
|
|
|
|
|
|
|
|
|
|
1,013
|
|
Income tax benefit from exercise of non-qualified stock options
|
|
|
|
|
|
|
|
|
|
|
1,300
|
|
|
|
|
|
|
|
|
|
|
|
1,300
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BALANCE, JANUARY 29, 2011
|
|
|
27,622,054
|
|
|
$
|
275
|
|
|
$
|
86,792
|
|
|
$
|
395,531
|
|
|
$
|
78
|
|
|
$
|
482,676
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The accompanying notes are an integral part of these
consolidated financial statements.
F-4
JOS. A.
BANK CLOTHIERS, INC.
FOR
THE YEARS ENDED JANUARY 31, 2009, JANUARY 30, 2010 AND JANUARY
29, 2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fiscal Year
|
|
|
|
2008
|
|
|
2009
|
|
|
2010
|
|
|
|
(In thousands)
|
|
|
CASH FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
58,408
|
|
|
$
|
71,155
|
|
|
$
|
85,799
|
|
Adjustments to reconcile net income to net cash provided
|
|
|
|
|
|
|
|
|
|
|
|
|
by operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Increase (decrease) in deferred taxes
|
|
|
1,311
|
|
|
|
(2,537
|
)
|
|
|
2,751
|
|
Depreciation and amortization
|
|
|
20,609
|
|
|
|
22,382
|
|
|
|
24,479
|
|
Loss on disposition of assets
|
|
|
279
|
|
|
|
160
|
|
|
|
357
|
|
Asset impairment charges
|
|
|
1,240
|
|
|
|
1,554
|
|
|
|
1,215
|
|
Equity compensation
|
|
|
|
|
|
|
|
|
|
|
1,252
|
|
Changes in assets and liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
(Increase) decrease in accounts receivable
|
|
|
(1,549
|
)
|
|
|
1,544
|
|
|
|
(3,665
|
)
|
(Increase) in inventories
|
|
|
(2,417
|
)
|
|
|
(9,079
|
)
|
|
|
(14,989
|
)
|
(Increase) decrease in prepaids and other current assets
|
|
|
817
|
|
|
|
1,741
|
|
|
|
(3,459
|
)
|
Decrease in non-current assets
|
|
|
27
|
|
|
|
61
|
|
|
|
83
|
|
Increase (decrease) in accounts payable
|
|
|
(17,609
|
)
|
|
|
(11,549
|
)
|
|
|
13,280
|
|
Increase in accrued expenses
|
|
|
8,018
|
|
|
|
12,120
|
|
|
|
1,738
|
|
Increase (decrease) in deferred rent
|
|
|
4,558
|
|
|
|
(2,890
|
)
|
|
|
(2,574
|
)
|
Increase (decrease) in other noncurrent liabilities
|
|
|
(152
|
)
|
|
|
86
|
|
|
|
(28
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by operating activities
|
|
|
73,540
|
|
|
|
84,748
|
|
|
|
106,239
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CASH FLOWS USED FOR INVESTING ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
|
|
|
Payments for capital expenditures
|
|
|
(35,105
|
)
|
|
|
(16,333
|
)
|
|
|
(29,352
|
)
|
Proceeds from disposal of assets
|
|
|
197
|
|
|
|
|
|
|
|
|
|
Proceeds from maturities of short-term investments
|
|
|
|
|
|
|
34,951
|
|
|
|
169,736
|
|
Payments to acquire short-term investments
|
|
|
|
|
|
|
(204,687
|
)
|
|
|
(189,789
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash used for investing activities
|
|
|
(34,908
|
)
|
|
|
(186,069
|
)
|
|
|
(49,405
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
|
|
|
Borrowings under revolving loan agreement
|
|
|
|
|
|
|
|
|
|
|
|
|
Repayment of borrowings under revolving loan agreement
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax benefit from exercise of stock options
|
|
|
625
|
|
|
|
65
|
|
|
|
1,300
|
|
Proceeds from issuance of common stock
|
|
|
1,536
|
|
|
|
234
|
|
|
|
1,013
|
|
Fractional share payments
|
|
|
|
|
|
|
|
|
|
|
(21
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by financing activities
|
|
|
2,161
|
|
|
|
299
|
|
|
|
2,292
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net increase (decrease) in cash and cash equivalents
|
|
|
40,793
|
|
|
|
(101,022
|
)
|
|
|
59,126
|
|
CASH AND CASH EQUIVALENTS, beginning of year
|
|
|
82,082
|
|
|
|
122,875
|
|
|
|
21,853
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CASH AND CASH EQUIVALENTS, end of year
|
|
$
|
122,875
|
|
|
$
|
21,853
|
|
|
$
|
80,979
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The accompanying notes are an integral part of these
consolidated financial statements.
F-5
JOS. A.
BANK CLOTHIERS, INC.
|
|
1.
|
SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES:
|
Description of Business Jos. A. Bank
Clothiers, Inc. is a nationwide designer, manufacturer, retailer
and direct marketer (through stores, catalog and Internet) of
mens tailored and casual clothing and accessories and is a
retailer of tuxedo rental products.
Principles of Consolidation The consolidated
financial statements include the accounts of Jos. A. Bank
Clothiers, Inc. and its wholly-owned subsidiaries (collectively
referred to as the Company). All intercompany
balances and transactions have been eliminated in consolidation.
Fiscal Year The Company maintains its
accounts on a fifty-two/fifty-three week fiscal year ending on
the Saturday closest to January 31. The fiscal years ended
January 31, 2009, January 30, 2010 and
January 29, 2011 each contained fifty-two weeks.
Seasonality The Companys net sales, net
income and inventory levels fluctuate on a seasonal basis and
therefore the results for one quarter are not necessarily
indicative of the results that may be achieved for a full fiscal
year. The increased customer traffic during the holiday season
and the Companys increased marketing efforts during this
peak selling time have resulted in sales and profits generated
during the fourth quarter becoming a larger portion of annual
sales and profits as compared to the other three quarters.
Seasonality is also impacted by growth as more new stores have
historically been opened in the second half of the year. During
the fourth quarters of fiscal years 2008, 2009 and 2010, the
Company generated approximately 36%, 36% and 37%, respectively,
of its annual net sales and approximately 52%, 50% and 48%,
respectively, of its annual net income.
Use of Estimates The preparation of the
consolidated financial statements in conformity with accounting
principles generally accepted in the United States of America
requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues
and expenses during the reporting period. Estimates have been
prepared on the basis of the most current and best information.
However, actual results could and probably will differ from
those estimates. Significant estimates in these financial
statements include net realizable value of inventory, estimates
of future cash flows associated with asset impairments, useful
lives for depreciation and amortization, estimates related to
the liability for health care costs, estimates related to the
sales returns reserve, estimates related to legal contingencies
and estimates related to the realizability of deferred tax
assets.
Cash and Cash Equivalents Cash and cash
equivalents totaled $21.9 million and $81.0 million at
fiscal year-end 2009 and fiscal year-end 2010, respectively, and
include bank deposit accounts, money market accounts and other
highly liquid investments with original maturities of
90 days or less. At fiscal year-end 2010, substantially all
of the cash and cash equivalents were invested in
U.S. Treasury bills with original maturities of
90 days or less and overnight federally-sponsored agency
notes.
Short-term investments Short-term investments
consist of investments in securities with maturities of less
than one year, excluding investments with original maturities of
90 days or less. At fiscal year-end 2010, short-term
investments consisted solely of U.S. Treasury bills with
remaining maturities ranging from two to four months. These
investments are classified as
held-to-maturity
and their market values approximate their carrying values.
Supplemental Cash Flow Information Interest
and income taxes paid were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fiscal Year
|
|
|
2008
|
|
2009
|
|
2010
|
|
|
(In thousands)
|
|
Interest paid
|
|
$
|
325
|
|
|
$
|
312
|
|
|
$
|
116
|
|
Income taxes paid
|
|
$
|
38,630
|
|
|
$
|
44,893
|
|
|
$
|
59,523
|
|
F-6
JOS. A.
BANK CLOTHIERS, INC.
NOTES TO
CONSOLIDATED FINANCIAL
STATEMENTS (Continued)
Inventories The Company records inventory at
the lower of cost or market (LCM). Cost is
determined using the
first-in,
first-out method. The Company capitalizes into inventory certain
warehousing and freight delivery costs associated with shipping
its merchandise to the point of sale. The Company periodically
reviews quantities of inventories on hand and compares these
amounts to the expected sales of each product. The Company
records a charge to cost of goods sold for the amount required
to reduce the carrying value of inventory to net realizable
value.
Franchise Fees The Company has 14 stores
operated by franchisees, representing approximately 3% of the
Companys store base. Monthly franchise fees are recognized
when earned under the franchise agreements. The fees are based
on a percentage of sales generated by the Franchise stores. In
addition, the Company sells inventory at a
mark-up to
the franchisees. Such fees are included in net sales in the
Consolidated Statements of Income. Initial franchise fees are
fully earned upon execution of the franchise agreements. There
are no further obligations on the part of the Company in order
to earn the initial franchise fee.
The Company does not have any controlling interest in any of its
franchisees through voting rights or any other means and, in
accordance with FASB
ASC 810-10,
Consolidation of Variable Interest Entities,
formerly FASB Interpretation No. 46R, Consolidation
of Variable Interest Entities, does not consolidate these
entities. The Company sells inventory to its Franchise stores at
prices above cost and the Franchise stores have the right to
return some of their inventory to the Company.
Gift Cards and Certificates The Company sells
gift cards and gift certificates to individuals and companies.
The Companys apparel incentive gift certificates are used
by various companies as a reward for achievement for their
employees. The Company also redeems proprietary gift cards and
gift certificates marketed by third-party premium/incentive
companies. The Company records a liability when a gift
card/certificate is purchased. As the gift card/certificate is
redeemed, the Company reduces the liability and records revenue.
Substantially all of the Companys gift cards/certificates
do not have expiration dates and they are all subject to state
escheatment laws. Based on historical experience, gift
cards/certificates redemptions after the escheatment due date
are remote and the Company recognizes any income (also referred
to as breakage) on these unredeemed gift
cards/certificates on a specific identification basis at that
time.
Tuxedo Rental Products Revenues from tuxedo
rental products are recognized on a gross basis upon completion
of the services to customers. When a customer orders a tuxedo
rental from the Company, an order is placed with a national
distributor who delivers the product to the Companys
stores, typically within several days of intended use. The
national distributor owns the product.
Landlord Contributions The Company typically
receives reimbursement from landlords for a portion of the cost
of leasehold improvements for new stores and, occasionally, for
renovations and relocations. These landlord contributions are
initially accounted for as an increase to deferred rent and as
an increase to prepaid and other current assets when the related
store is opened. When collected, the Company records cash and
reduces the prepaid and other current assets account. The
collection of landlord contributions is presented in the
Consolidated Statements of Cash Flows as an operating activity.
The deferred rent is amortized over the lease term in a manner
that is consistent with the Companys policy to
straight-line rent expense over the term of the lease. The
amortization is recorded as a reduction to sales and marketing
expense which is consistent with the classification of lease
expense. The amortization of deferred rent recognized in the
Consolidated Statements of Income was $7.0 million,
$7.6 million and $8.0 million in fiscal years 2008,
2009 and 2010, respectively.
Catalog Costs related to mail order catalogs,
including design, printing and distribution, are included in
prepaid expenses and other current assets consistent with FASB
ASC 720-35,
Advertising Costs, formerly Statement of Position
No. 93-7,
Reporting on Advertising Costs. These costs are
amortized as sales and marketing expense based on actual revenue
for the period as compared to aggregate projected revenue over
the benefit period in which customers are expected to order,
which is typically over a six month period. The
F-7
JOS. A.
BANK CLOTHIERS, INC.
NOTES TO
CONSOLIDATED FINANCIAL
STATEMENTS (Continued)
benefit period is based on historical ordering patterns. At
fiscal year-end 2009 and fiscal year-end 2010, the amounts
included in prepaid expenses and other current assets related to
catalog costs were $1.3 million and $1.1 million,
respectively.
Marketing Expenses Marketing expenses consist
of advertising, display, list rental and Internet advertising
costs. Marketing costs are recognized as expenses the first time
the marketing takes place. Marketing expense, excluding catalog
costs, was approximately $45.1 million, $49.5 million
and $57.1 million in fiscal years 2008, 2009 and 2010,
respectively. These amounts exclude catalog production costs of
approximately $5.9 million, $5.7 million and
$5.9 million for fiscal years 2008, 2009 and 2010,
respectively. Marketing and catalog costs are included in
Sales and marketing in the accompanying Consolidated
Statements of Income.
Contingent Rental Expense The Company has
certain store leases that determine all or a portion of their
rent based on annual aggregate sales from the respective stores.
The Company recognizes contingent rental expense prior to
achievement of the specified target that triggers the contingent
rental provided that achievement of that target is probable. The
amount is recorded on a straight-line basis throughout the year.
Property, Plant and Equipment Property, plant
and equipment are stated at cost. The Company depreciates and
amortizes property, plant and equipment on a straight-line basis
over the following estimated useful lives:
|
|
|
Asset Class
|
|
Estimated Useful Lives
|
|
Buildings and improvements
|
|
25 years
|
Equipment
|
|
3-10 years
|
Furniture and fixtures
|
|
10 years
|
Leasehold improvements
|
|
Generally 10 years
|
The Company amortizes leasehold improvements over the shorter of
the lease term or the useful life of the improvements.
Depreciation and amortization expense of property, plant, and
equipment for fiscal years 2008, 2009 and 2010 was approximately
$20.6 million, $22.4 million and $24.5 million,
respectively. Maintenance and repairs that do not extend the
lives of the assets are expensed as incurred.
Other Noncurrent Assets Other noncurrent
assets include deferred financing costs and deposits. Deferred
financing costs were amortized as additional interest expense
over the remaining term of the Companys debt agreements,
which expired in April 2010, using the effective interest
method. Amortization expense was $0.1 million for each of
fiscal years 2008 and 2009 and was less than $0.1 million
in fiscal year 2010.
Long-Lived Assets Long-lived assets, such as
property, plant, and equipment, subject to depreciation and
amortization, are reviewed for impairment whenever events or
changes in circumstances indicate that the carrying amount of an
asset may not be recoverable. Recoverability of assets to be
held and used is measured by comparing the carrying amount of an
asset to estimated undiscounted future cash flows expected to be
generated by the asset. If the carrying amount of an asset
exceeds its estimated future cash flows, an impairment charge is
recognized in the amount by which the carrying amount of the
asset exceeds the fair value of the asset. During fiscal years
2008, 2009 and 2010, the Company recognized impairment charges
of $1.2 million, $1.6 million and $1.2 million,
respectively, relating to several stores within its Stores
segment. The charges were included in Sales and
marketing in the Consolidated Statements of Income. The
aggregate fair value of the property plant and equipment
recorded for the stores impaired in fiscal years 2008, 2009 and
2010 were estimated to be $0.1 million, $0.3 million
and $0.2 million, respectively. The fair value measurements
related to these assets are considered to fall under
level 3 of the fair value hierarchy of ASC 820,
Fair Value Measurements and Disclosures, since the
valuations are based on significant unobservable inputs. These
valuations are based on discounted cash flow analyses with the
significant
F-8
JOS. A.
BANK CLOTHIERS, INC.
NOTES TO
CONSOLIDATED FINANCIAL
STATEMENTS (Continued)
unobservable inputs being the future projected cash flows which
are reflective of the Companys best estimates and the
discount rates which the Company believes are representative of
arms-length third-party required rates of returns.
Fair Value of Financial Instruments For cash
and cash equivalents, accounts receivable and accounts payable,
the carrying amounts reflect the market value due to the
short-term nature of these accounts. For short-term investments,
the carrying amounts reflect the market value due to the
short-term maturities of these instruments. For long-term debt,
rates available for debt with similar terms and remaining
maturities are used to estimate the fair value of existing debt.
The Company had no debt at fiscal year-end 2009 and fiscal
year-end 2010.
Net Sales In the Companys Stores
segment, net sales are recognized at the
point-of-sale.
In the Companys Direct Marketing segment, sales are
recognized when products are shipped to the customer. The
Company presents sales net of sales tax in the accompanying
Consolidated Statements of Income. The Company provides for
sales returns based on estimated returns in future periods. The
sales return reserves at fiscal years 2008, 2009 and 2010 were
$1.0 million, $2.0 million and $2.4 million,
respectively, and were included in Accrued expenses
in the accompanying Consolidated Balance Sheets.
Classification of Expenses Cost of goods sold
primarily includes the cost of merchandise, the cost of
tailoring and freight from vendors to the distribution center
and from the distribution center to the stores. Sales and
marketing expenses consist primarily of Full-line store, Outlet
and Factory store and Direct Marketing occupancy, payroll,
selling and other variable costs and total Company advertising
and marketing expenses. General and administrative expenses
consist primarily of corporate and distribution center costs and
total company performance based incentive compensation (other
than commissions).
Lease Accounting Most lease agreements
provide for monthly rent payments that may change over the lease
term. For leases whereby rent payments can be reasonably
estimated, rent expense is recorded on a straight-line basis
over a consistent lease period (generally, the initial
non-cancelable lease term plus renewal option periods provided
for in the lease that can be reasonably assured) and the excess
of expense over cash amounts paid are included in deferred
rent in the accompanying Consolidated Balance Sheets. For
lease agreements with monthly rent payments that cannot be
estimated, rent expense is recorded as incurred. Any rent
concessions, including landlord contributions, are amortized
over the lease term as a reduction of rent expense. The term of
the lease begins on the date the Company has the right to
control the use of the leased property, generally approximately
six to nine weeks prior to opening the store.
Store Opening Costs Costs incurred in
connection with store
start-up
costs, such as travel for recruitment, training and setup of new
store openings, are expensed as incurred.
Income Taxes Income taxes are accounted for
under the asset and liability method in accordance with FASB
ASC 740, Income Taxes (ASC 740),
formerly SFAS No. 109, Accounting for Income
Taxes. Deferred tax assets and liabilities are recognized
for the future tax consequences attributable to differences
between the financial statement carrying amounts of existing
assets and liabilities and their respective tax bases and
operating loss and tax credit carry forwards. Deferred tax
assets and liabilities are measured using enacted tax rates
expected to apply to taxable income in the years in which those
temporary differences are expected to be recovered or settled.
The effect on deferred tax assets and liabilities of a change in
tax rates is recognized in the Consolidated Statements of Income
in the period that includes the enactment date.
The Company accounts for uncertainties in income taxes pursuant
to ASC 740, formerly FASB Financial Interpretation
No. 48, Accounting for Uncertainty in Income
Taxes, which clarifies the accounting for uncertainty in
income taxes recognized in the financial statements under
SFAS 109. The Company recognizes tax liabilities for
uncertain income tax positions (unrecognized tax
benefits) pursuant to ASC 740 where an evaluation has
indicated that it is more likely than not that the tax positions
will not be sustained on an audit. The Company estimates the
unrecognized tax benefits as the largest amount that is more
than 50% likely to be
F-9
JOS. A.
BANK CLOTHIERS, INC.
NOTES TO
CONSOLIDATED FINANCIAL
STATEMENTS (Continued)
realized upon ultimate settlement. The Company re-evaluates
these uncertain tax positions on a quarterly basis or when new
information becomes available to management. The re-evaluations
are based on many factors, including but not limited to, changes
in facts or circumstances, changes in tax law, successfully
settled issues under audit, expirations due to statutes of
limitations, and new federal or state audit activity. The
Company also recognizes accrued interest and penalties related
to these unrecognized tax benefits which are included in the
provision for income taxes in the Consolidated Statement of
Income.
Earnings Per Share (EPS) Basic
earnings per share is calculated by dividing net income by the
weighted average number of common shares outstanding for the
period. Diluted earnings per share is calculated by dividing net
income by the diluted weighted average common shares, which
reflects the potential dilution of common stock equivalents. The
weighted average shares used to calculate basic and diluted
earnings per share are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fiscal Year
|
|
|
|
2008
|
|
|
2009
|
|
|
2010
|
|
|
|
(In thousands)
|
|
|
Weighted average shares outstanding for basic EPS
|
|
|
27,321
|
|
|
|
27,452
|
|
|
|
27,553
|
|
Dilutive effect of common stock equivalents
|
|
|
347
|
|
|
|
333
|
|
|
|
298
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding for diluted EPS
|
|
|
27,668
|
|
|
|
27,785
|
|
|
|
27,851
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The Company uses the treasury method for calculating the
dilutive effect of common stock equivalents. For fiscal years
2008, 2009 and 2010 there were no anti-dilutive common stock
equivalents which were excluded from the calculation of diluted
shares.
On June 17, 2010, the Companys Board of Directors
declared a stock split in the form of a 50% stock dividend which
was distributed on August 18, 2010 to stockholders of
record as of July 30, 2010. All share and per share amounts
of common shares included in this Annual Report on
Form 10-K
have been adjusted to reflect this stock dividend.
Performance-Based Incentive Plans
Performance-based incentive plans provide annual cash incentive
compensation to certain employees based upon, among other
things, the attainment of certain annual earnings and
performance goals. At each interim quarter-end, the Company
estimates the probability that such goals will be attained based
on
results-to-date
and the likelihood of discretionary payments and records
incentive compensation accordingly, based on the projected
annual incentive payments.
Equity Compensation The Company accounts for
its equity awards in accordance with FASB ASC 718,
Share-Based Payment (ASC 718), which
requires the compensation cost resulting from all share-based
awards to be recognized in the financial statements. The amount
of compensation is measured based on the grant-date fair value
of the awards and is recognized over the vesting period of the
awards. The vesting of awards to both the officers and directors
is subject to service conditions being met, ranging from one to
three years. Additionally, the vesting of awards to officers is
subject to performance conditions being met such as, among other
things, the attainment of certain annual earnings and
performance goals in fiscal year 2010. For these officer awards
(which represents approximately $2.5 million of the
aggregate grant date fair value of $3.4 million for fiscal
year 2010), the Company estimates the probability that such
goals will be attained based on
results-to-date
at each interim quarter-end and records compensation cost for
these awards based on the awards projected to vest. Share-based
compensation expense recognized for fiscal year 2010 related to
equity awards issued under the Jos. A. Bank Clothiers, Inc. 2010
Equity Incentive Plan was $1.2 million and the tax benefit
recognized related to this compensation was $0.5 million.
There was no share based compensation expense in fiscal years
2008 and 2009 as all the stock option awards issued under equity
plans existing prior to fiscal year 2010 were fully issued and
vested prior to the effective date of ASC 718.
F-10
JOS. A.
BANK CLOTHIERS, INC.
NOTES TO
CONSOLIDATED FINANCIAL
STATEMENTS (Continued)
Healthcare Costs Healthcare claims for
eligible participating employees are self-insured by the
Company, subject to certain deductibles and limitations per
incident where third party insurance provides stop
loss coverage. The liability for healthcare costs includes
an estimate for claims incurred but not reported. In estimating
this liability, we consider historical claims experience and the
timing of the submission of expected claims.
Recently Issued Accounting Standards In
October 2009, the FASB issued ASU
2009-13,
Multiple-Deliverable Revenue Arrangements (ASU
2009-13).
ASU 2009-13
addresses revenue recognition of multiple-element sales
arrangements. It establishes a selling price hierarchy for
determining the selling price of each product or service, with
vendor-specific objective evidence (VSOE) at the
highest level, third-party evidence of VSOE at the intermediate
level, and a best estimate at the lowest level. It replaces
fair value with selling price in revenue
allocation guidance. It also significantly expands the
disclosure requirements for such arrangements. ASU
2009-13 is
effective prospectively for sales entered into or materially
modified in fiscal years beginning on or after June 15,
2010, with early adoption permitted. The Company is currently
evaluating the impact ASU
2009-13 may
have on its consolidated financial statements.
Recently Proposed Amendments to Accounting
Standards In August 2010, the FASB issued an
exposure draft, Leases (the Exposure
Draft), which would replace the existing guidance in
ASC 840, Leases. Under the Exposure Draft, a
lessees rights and obligations under all leases, including
existing and new arrangements, would be recognized as assets and
liabilities, respectively, on the balance sheet. The comment
period for the Exposure Draft ended on December 15, 2010
and a final standard is expected to be issued in 2011. When and
if the proposed guidance becomes effective, it will possibly
have a significant impact on the Companys consolidated
financial statements. However, as the Exposure Draft is still in
process, the Company is unable to determine at this time the
impact this proposed change in accounting may have on its
consolidated financial statements.
Inventories as of January 30, 2010 and January 29,
2011, consist of the following:
|
|
|
|
|
|
|
|
|
|
|
January 30,
|
|
|
January 29,
|
|
|
|
2010
|
|
|
2011
|
|
|
|
(In thousands)
|
|
|
Finished goods, net
|
|
$
|
209,443
|
|
|
$
|
222,251
|
|
Raw materials
|
|
|
8,878
|
|
|
|
11,059
|
|
|
|
|
|
|
|
|
|
|
Total inventories, net
|
|
$
|
218,321
|
|
|
$
|
233,310
|
|
|
|
|
|
|
|
|
|
|
|
|
3.
|
PREPAID
EXPENSES AND OTHER CURRENT ASSETS:
|
Prepaid expenses and other current assets as of January 30,
2010 and January 29, 2011, consist of the following:
|
|
|
|
|
|
|
|
|
|
|
January 30,
|
|
|
January 29,
|
|
|
|
2010
|
|
|
2011
|
|
|
|
(In thousands)
|
|
|
Landlord contributions receivable
|
|
$
|
898
|
|
|
$
|
2,783
|
|
Prepaid rents
|
|
|
4,547
|
|
|
|
4,916
|
|
Prepaid expenses and other current assets
|
|
|
10,590
|
|
|
|
11,795
|
|
|
|
|
|
|
|
|
|
|
Total prepaid expenses and other current assets, net
|
|
$
|
16,035
|
|
|
$
|
19,494
|
|
|
|
|
|
|
|
|
|
|
F-11
JOS. A.
BANK CLOTHIERS, INC.
NOTES TO
CONSOLIDATED FINANCIAL
STATEMENTS (Continued)
|
|
4.
|
PROPERTY,
PLANT AND EQUIPMENT:
|
Property, plant and equipment as of January 30, 2010 and
January 29, 2011, consist of the following:
|
|
|
|
|
|
|
|
|
|
|
January 30,
|
|
|
January 29,
|
|
|
|
2010
|
|
|
2011
|
|
|
|
(In thousands)
|
|
|
Land
|
|
$
|
1,819
|
|
|
$
|
1,819
|
|
Buildings and improvements
|
|
|
14,742
|
|
|
|
15,053
|
|
Leasehold improvements
|
|
|
123,297
|
|
|
|
132,790
|
|
Furniture and fixtures
|
|
|
78,266
|
|
|
|
85,500
|
|
Equipment and other
|
|
|
44,261
|
|
|
|
51,141
|
|
|
|
|
|
|
|
|
|
|
|
|
|
262,385
|
|
|
|
286,303
|
|
Less: accumulated depreciation and amortization
|
|
|
(138,246
|
)
|
|
|
(157,700
|
)
|
|
|
|
|
|
|
|
|
|
Property, plant and equipment, net
|
|
$
|
124,139
|
|
|
$
|
128,603
|
|
|
|
|
|
|
|
|
|
|
As of January 30, 2010 and January 29, 2011, included
in the amounts shown above are approximately $0.6 million
and $1.8 million, respectively, of accrued property, plant
and equipment additions that have been incurred but not
completely invoiced by vendors, and therefore, not paid by the
respective year-ends. These amounts are excluded from payments
for capital expenditures and changes in accrued expenses in the
accompanying Consolidated Statements of Cash Flows.
Accrued expenses as of January 30, 2010 and
January 29, 2011, consist of the following:
|
|
|
|
|
|
|
|
|
|
|
January 30,
|
|
|
January 29,
|
|
|
|
2010
|
|
|
2011
|
|
|
|
(In thousands)
|
|
|
Accrued compensation and benefits
|
|
$
|
24,037
|
|
|
$
|
24,918
|
|
Gift cards and certificates payable
|
|
|
13,923
|
|
|
|
15,440
|
|
Accrued federal and state income tax
|
|
|
14,858
|
|
|
|
9,056
|
|
Current portion of deferred rent
|
|
|
8,896
|
|
|
|
9,745
|
|
Accrued advertising expenses
|
|
|
4,335
|
|
|
|
5,667
|
|
Other accrued expenses
|
|
|
19,207
|
|
|
|
23,339
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
85,256
|
|
|
$
|
88,165
|
|
|
|
|
|
|
|
|
|
|
Other accrued expenses consist primarily of liabilities related
to: accrued franchise fees, sales return reserves, accrued
property, plant and equipment additions, sales and property
taxes and other accrued costs.
|
|
6.
|
LONG-TERM
DEBT AND CREDIT AGREEMENT:
|
The Company had no long-term or short-term debt outstanding as
of January 30, 2010 or January 29, 2011.
During the past several years and through the first quarter of
fiscal year 2010, the Company maintained a $100 million
credit facility with a maturity date of April 30, 2010.
Based on the Companys cash and short-term investment
positions, and projected cash needs and market conditions, the
Company elected not to negotiate a renewal or replacement of the
credit facility. As a result, the credit facility expired on
April 30, 2010 in accordance with its terms.
F-12
JOS. A.
BANK CLOTHIERS, INC.
NOTES TO
CONSOLIDATED FINANCIAL
STATEMENTS (Continued)
The provision for income taxes consisted of the following:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fiscal Year
|
|
|
|
2008
|
|
|
2009
|
|
|
2010
|
|
|
|
(In thousands)
|
|
|
Federal:
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
|
|
$
|
30,222
|
|
|
$
|
40,638
|
|
|
$
|
43,768
|
|
Deferred
|
|
|
1,441
|
|
|
|
(2,132
|
)
|
|
|
2,949
|
|
State:
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
|
|
|
6,193
|
|
|
|
8,158
|
|
|
|
9,742
|
|
Deferred
|
|
|
(298
|
)
|
|
|
(436
|
)
|
|
|
(198
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision for income taxes
|
|
$
|
37,558
|
|
|
$
|
46,228
|
|
|
$
|
56,261
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision for income tax is reconciled to the amount computed by
applying the statutory Federal income tax rate of 35% for fiscal
years 2008, 2009 and 2010 to income before provision for income
taxes as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fiscal Year
|
|
|
|
2008
|
|
|
2009
|
|
|
2010
|
|
|
|
(In thousands)
|
|
|
Computed federal tax provision at statutory rates
|
|
$
|
33,588
|
|
|
$
|
41,084
|
|
|
$
|
49,721
|
|
State income taxes, net of federal income tax effect
|
|
|
3,832
|
|
|
|
5,019
|
|
|
|
6,204
|
|
Non-deductible compensation
|
|
|
|
|
|
|
|
|
|
|
131
|
|
Change in tax reserves
|
|
|
45
|
|
|
|
32
|
|
|
|
107
|
|
Other, net
|
|
|
93
|
|
|
|
93
|
|
|
|
98
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision for income taxes
|
|
$
|
37,558
|
|
|
$
|
46,228
|
|
|
$
|
56,261
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The tax effects of temporary differences that give rise to
significant positions of deferred tax assets and deferred tax
liabilities as of January 30, 2010 and January 29,
2011 are as follows:
|
|
|
|
|
|
|
|
|
|
|
January 30,
|
|
|
January 29,
|
|
|
|
2010
|
|
|
2011
|
|
|
|
(In thousands)
|
|
|
Deferred tax assets:
|
|
|
|
|
|
|
|
|
Current accrued liabilities and other
|
|
$
|
5,021
|
|
|
$
|
7,042
|
|
Noncurrent lease obligations
|
|
|
18,494
|
|
|
|
15,978
|
|
Noncurrent accrued liabilities and other
|
|
|
363
|
|
|
|
448
|
|
|
|
|
|
|
|
|
|
|
|
|
|
23,878
|
|
|
|
23,468
|
|
Deferred tax liabilities:
|
|
|
|
|
|
|
|
|
Current inventories
|
|
|
(8,393
|
)
|
|
|
(10,882
|
)
|
Current prepaid expenses and other current assets
|
|
|
(1,692
|
)
|
|
|
(1,436
|
)
|
Noncurrent property, plant and equipment
|
|
|
(20,465
|
)
|
|
|
(20,573
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
(30,550
|
)
|
|
|
(32,891
|
)
|
|
|
|
|
|
|
|
|
|
Net deferred tax liability
|
|
$
|
(6,672
|
)
|
|
$
|
(9,423
|
)
|
|
|
|
|
|
|
|
|
|
F-13
JOS. A.
BANK CLOTHIERS, INC.
NOTES TO
CONSOLIDATED FINANCIAL
STATEMENTS (Continued)
The following table summarizes the activity related to our
unrecognized tax benefits and related accrued interest and
penalties for fiscal years 2009 and 2010:
|
|
|
|
|
|
|
|
|
|
|
Fiscal Year
|
|
|
|
2009
|
|
|
2010
|
|
|
|
(In thousands)
|
|
|
Balance at January 30, 2010
|
|
$
|
754
|
|
|
$
|
786
|
|
Increases related to current year tax positions
|
|
|
245
|
|
|
|
408
|
|
Settlement of tax positions
|
|
|
|
|
|
|
(70
|
)
|
Expiration of the statue of limitations for the assessment of
taxes
|
|
|
(213
|
)
|
|
|
(301
|
)
|
|
|
|
|
|
|
|
|
|
Balance at January 29, 2011
|
|
$
|
786
|
|
|
$
|
823
|
|
|
|
|
|
|
|
|
|
|
In assessing the realizability of deferred tax assets,
management considered whether it was more likely than not that
some portion or all of the deferred tax assets will be realized.
The ultimate realization of the deferred tax assets is dependent
upon existence of taxable income in carryback periods and the
generation of future taxable income during periods in which
temporary differences become deductible. Management considered
income taxes paid during the previous two years and projected
future taxable income in making this assessment. Based upon the
level of historical taxable income and projections for future
taxable income over the periods in which the temporary
differences are deductible, management has determined that no
valuation allowance was required at January 30, 2010 and
January 29, 2011.
The fiscal year 2010 effective income tax rate was 39.6%, as
compared with 39.4% for fiscal year 2009. The increase during
fiscal year 2010 was largely related to higher state income
taxes. During the third quarter of fiscal year 2010, the Company
realigned its legal entity structure to more appropriately
reflect its operational organization. As a result, the Company
anticipates that it will incur lower state income tax
liabilities beginning in fiscal year 2011 and thereafter,
assuming no significant changes to U.S. federal or state
income tax rules.
Significant changes to U.S. federal or state income tax
rules could occur as part of future legislation. Such changes
could influence the Companys future income tax expense
and/or the
timing of income tax deductions. The impact of such changes on
the Companys business operations and financial statements
remains uncertain. However, as the possibility of any enactment
progresses, the Company will continue to monitor current
developments and assess the potential implications of these tax
law changes on its business and consolidated financial
statements.
The Company files a federal income tax return and state and
local income tax returns in various jurisdictions. The Internal
Revenue Service (IRS) has audited tax returns
through fiscal year 2008, including its examination of the tax
return for fiscal years 2007 and 2008 which was finalized in
October 2010. No material adjustments were required to these tax
returns as a result of the examination by the IRS. For the years
before fiscal year 2007, the majority of the Companys
state and local income tax returns are no longer subject to
examinations by taxing authorities.
Defined Benefit Pension & Post-Retirement
Plans The Company maintains a noncontributory
defined benefit pension plan and a post-retirement benefit plan
which cover certain union and nonunion employees. The annual
contributions for the pension plan are not less than the minimum
funding standards set forth in the Employee Retirement Income
Security Act of 1974, as amended. The Company does not pre-fund
the benefits for the post-retirement benefit plan. The plans
provide for eligible employees to receive benefits based
principally on years of service with the Company. The Company
records the expected cost of these benefits as expense during
the years that employees render service.
F-14
JOS. A.
BANK CLOTHIERS, INC.
NOTES TO
CONSOLIDATED FINANCIAL
STATEMENTS (Continued)
The Company accounts for these plans under FASB ASC 715,
Defined Benefit Plans Pension, formerly
SFAS No. 158, Employers Accounting for
Defined Benefit Pension and Other Postretirement Plans, an
amendment of FASB Statements No. 87, 88, 106, and
132(R), which requires an employer to recognize the funded
status of any defined benefit pension
and/or other
postretirement benefit plans, including any unrecognized prior
service costs, transition obligations or actuarial gains/losses,
as an asset or liability in its balance sheet.
The following table sets forth the plans benefit
obligations, fair value of plan assets, and funded status at
January 30, 2010 and January 29, 2011:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pension
|
|
|
Postretirement
|
|
|
|
Benefits
|
|
|
Benefits
|
|
|
|
Fiscal Year
|
|
|
Fiscal Year
|
|
|
|
2009
|
|
|
2010
|
|
|
2009
|
|
|
2010
|
|
|
|
(In thousands)
|
|
|
Accumulated benefit obligation
|
|
$
|
978
|
|
|
$
|
1,207
|
|
|
$
|
111
|
|
|
$
|
53
|
|
Fair value of plan assets
|
|
|
1,137
|
|
|
|
1,395
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Funded status
|
|
|
159
|
|
|
|
188
|
|
|
|
(111
|
)
|
|
|
(53
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accrued (prepaid) benefit cost recognized in the balance sheets
|
|
$
|
(159
|
)
|
|
$
|
(188
|
)
|
|
$
|
111
|
|
|
$
|
53
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average discount rate assumption used to determine
benefit obligations as of January 30, 2010 and
January 29, 2011 (the dates of the latest actuarial
calculations) was 6.00% and 5.75%, respectively.
Weighted-average assumptions used to determine net cost included
a discount rate of 5.75%, 6.25% and 6.00% for fiscal years 2008,
2009 and 2010, respectively. The return on plan assets
assumption were 8.0%, 7.0% and 7.0% for fiscal years 2008, 2009
and 2010, respectively.
Plan assets of the Companys pension benefits as of
January 30, 2010 and January 29, 2011 consisted
primarily of balanced mutual funds and short-term investment
funds.
Pension expense recognized in the Companys statements of
income was $0.1 million for each of fiscal years 2008, 2009
and 2010. The Company contributed $0.1 million and
$0.1 million in fiscal years 2009 and 2010, respectively,
to the pension plan. The Company does not expect to be required
to contribute significant amounts of cash in fiscal year 2011 to
the pension plan.
Profit Sharing Plan The Company maintains a
defined contribution 401(k) profit sharing plan for its
employees. All non-union and certain union employees are
eligible to participate in the plan on the first day of the
month following 3 months of service. Employee contributions
to the plan are limited based on applicable sections of the
Internal Revenue Code. The Companys contribution to the
401(k) plan is discretionary. Amounts expensed by the Company
related to the plan were approximately $0.6 million,
$0.8 million, and $0.9 million for fiscal years 2008,
2009 and 2010, respectively.
Deferred Compensation Plan The Company also
maintains a non-qualified deferred compensation plan for certain
executives. All assets of the plan are fully subject to the
Companys creditors. There were no matching contributions
by the Company in any of fiscal years 2008, 2009 or 2010,
although contributions were made by certain executives. Included
in the Companys Consolidated Balance Sheets, within
Prepaid expenses and other current assets and
Accrued Expenses, are separate amounts of an equal
asset and liability of $1.7 million at fiscal year-end 2009
and $2.2 million at fiscal year-end 2010.
|
|
9.
|
COMMITMENTS
AND CONTINGENCIES:
|
Massachusetts Laborers Annuity Fund (MLAF) was
the lead plaintiff in a class action filed in the United States
District Court for the District of Maryland against the Company,
Robert N. Wildrick, R. Neal
F-15
JOS. A.
BANK CLOTHIERS, INC.
NOTES TO
CONSOLIDATED FINANCIAL
STATEMENTS (Continued)
Black and David E. Ullman (Roy T. Lefkoe v. Jos. A. Bank
Clothiers, Inc., et al., Civil Action Number
1:06-cv-01892-WMN)
(the Class Action). The Class Action was
initially instituted on July 24, 2006. On behalf of
purchasers of the Companys stock between December 5,
2005 and June 7, 2006 (the Class Period),
the Class Action purported to make claims under
Sections 10(b) and 20(a) and
Rule 10b-5
of the Securities Exchange Act of 1934, based on the
Companys disclosures during the Class Period. The
Class Action sought unspecified damages, costs and
attorneys fees.
In late October 2009, the Company and MLAF agreed to settle the
Class Action for an amount that was within the limits of
the Companys insurance coverage. The settlement did not
have any impact on the Companys financial statements.
The Stipulation of Settlement (the Stipulation)
entered into by the Company and MLAF included a statement that,
at the time of the settlement, the substantial discovery
completed did not substantiate any of the claims asserted
against the individual defendants. By Order dated
July 8, 2010 and filed on July 20, 2010, the court
approved the settlement of the Class Action in accordance
with the Stipulation and dismissed the Class Action with
prejudice.
On November 12, 2009, Casey J. Stewart, a former employee
of the Company, on behalf of himself and all others similarly
situated, filed a Complaint against the Company in the United
States District Court for the Northern District of California
(Case number CV 09 5348 PJH) alleging racial discrimination by
the Company with respect to hiring and terms and conditions of
employment. Pursuant to a Motion to Transfer Venue filed by the
Company, the case was transferred to the United States District
Court for the Eastern District of California (Case number
2:10-cv-00481-GEB-DAD). On October 21, 2010, the parties
filed a Stipulated Dismissal of Complaint requesting the court
to dismiss the Complaint with prejudice, each party to bear its
own fees and costs. By Order dated October 21, 2010, the
court dismissed the case with prejudice.
The Company is also a party to routine litigation matters that
are incidental to its business. From time to time, other legal
matters in which the Company may be named as a defendant are
expected to arise in the normal course of the Companys
business activities. The resolution of the Companys
litigation matters cannot be accurately predicted and there is
no estimate of costs or potential losses, if any. Accordingly,
the Company cannot determine whether its insurance coverage, if
any, would be sufficient to cover such costs or potential
losses, if any, and has not recorded any provision for cost or
loss associated with these actions. It is possible that the
Companys consolidated financial statements could be
materially impacted in a particular fiscal quarter or year by an
unfavorable outcome or settlement of any of these actions.
Employment Agreements and Performance-Based Incentive
Compensation The Company has employment
agreements with certain of its executives expiring in either
January 2012 or January 2013, with aggregated base compensation
of $5.6 million (not including annual adjustments) over the
terms. Depending on the circumstances of termination, the
Company has severance obligations to these and certain other
executives aggregating up to approximately $4.1 million,
not including annual adjustments. These executives are also
eligible for additional performance-based incentive payments. In
addition, other employees are eligible for incentive-based
payments based on performance, including store managers and
regional sales directors, although these payments are not based
on employment agreements. Performance-based incentive
compensation expense (excluding commissions) for all eligible
employees was approximately $7.8 million in fiscal year
2008, $8.5 million in fiscal year 2009 and
$9.2 million in fiscal year 2010.
Lease Obligations The Company has numerous
noncancelable operating leases for retail stores, distribution
center, office and tailoring space and equipment. Certain
facility leases provide for annual base minimum rentals plus
contingent rentals based on sales. Renewal options are available
under the majority of the leases.
F-16
JOS. A.
BANK CLOTHIERS, INC.
NOTES TO
CONSOLIDATED FINANCIAL
STATEMENTS (Continued)
Future minimum lease payments, including rent escalations, under
noncancelable operating leases for stores and other leased
facilities opened and equipment placed in service as of fiscal
year-end 2010, were as follows:
|
|
|
|
|
Fiscal Year Ending
|
|
Amount
|
|
|
|
(In thousands)
|
|
|
January 28, 2012 (Fiscal year 2011)
|
|
$
|
62,364
|
|
February 2, 2013 (Fiscal year 2012)
|
|
|
59,046
|
|
February 1, 2014 (Fiscal year 2013)
|
|
|
53,833
|
|
January 31, 2015 (Fiscal year 2014)
|
|
|
45,167
|
|
January 30, 2014 (Fiscal year 2015)
|
|
|
36,043
|
|
Thereafter
|
|
|
78,593
|
|
|
|
|
|
|
Total
|
|
$
|
335,046
|
|
|
|
|
|
|
The minimum rentals above do not include additional payments for
contingent percentage rent which is typically based on sales,
deferred rent amortization, insurance, property taxes, utilities
and other common area maintenance costs that may be due as
provided for in the leases.
Total minimum rental expense for operating leases was
approximately $50.1 million, $52.0 million and
$57.0 million for fiscal years 2008, 2009 and 2010,
respectively. Contingent rent expense in fiscal years 2008, 2009
and 2010, which was based on a percentage of net sales at the
applicable properties, was approximately $2.1 million,
$2.2 million and $2.5 million, respectively.
As of fiscal year-end 2010, the Company had also entered into
various lease agreements for stores to be opened and equipment
placed in service subsequent to year end. The future minimum
lease payments under these agreements were $1.2 million in
fiscal year 2011, $1.3 million in fiscal year 2012,
$1.3 million in fiscal year 2013, $1.4 million in
fiscal year 2014, $1.4 million in fiscal year 2015 and
$7.5 million thereafter.
Inventories The Company ordinarily places
orders for the purchases of inventory at least one to two
seasons in advance. Approximately 3% of the total product
purchases (including piece goods) in fiscal year 2010 were
sourced from United States suppliers, and approximately 97% were
sourced from suppliers in other countries. In fiscal year 2010,
approximately 37% of the total product purchases were from
suppliers in China (including Hong Kong), 24% in Mexico, 9% in
Bangladesh, 7% in Sri Lanka and 7% in India. In fiscal year
2010, the Company purchased approximately 51% of its finished
product through a buying agent who sources the products from
various vendors, including those described above. No other
country represented more than 5% of total product purchases in
fiscal year 2010. These percentages reflect the countries where
the suppliers are primarily operating or manufacturing, which
may not always be where the suppliers are actually domiciled.
The Company purchases the raw materials for approximately 9% of
its finished products. Five vendors accounted for over 72% of
the raw materials purchased directly by the Company in fiscal
year 2010. The remainder of its finished products are purchased
as finished units, with the vendor responsible for the
acquisition of the raw materials based on the Companys
specifications.
Other The Company has a consulting agreement
with its current Chairman of the Board to consult on matters of
strategic planning and initiatives commencing February 1,
2009 at a fee of $0.8 million per year for a period of
three years. On November 30, 2010, the consulting agreement
was extended from January 31, 2012 to January 26, 2014
with all other terms of the Consulting agreement remaining
unchanged. The Company has an agreement with David Leadbetter, a
golf professional, which allows the Company to produce golf and
other apparel under Leadbetters name. The agreement
expires in January 2016. The minimum royalty under this
agreement was $0.2 million in each of fiscal years 2008,
2009 and 2010 and is expected to be $0.2 million for fiscal
year 2011.
F-17
JOS. A.
BANK CLOTHIERS, INC.
NOTES TO
CONSOLIDATED FINANCIAL
STATEMENTS (Continued)
|
|
10.
|
INCENTIVE
STOCK OPTION AND OTHER EQUITY PLANS:
|
Effective January 28, 1994, the Company adopted an
Incentive Plan (the 1994 Plan). The 1994 Plan
generally provides for the granting of stock, stock options,
stock appreciation rights, restricted shares or any combination
of the foregoing to the eligible participants, as defined, for
issuance of up to 3.4 million shares of common stock in the
aggregate, of which options to purchase all of such shares had
been granted as of January 29, 2005 (fiscal year
2004). In March 2002, the Company adopted an Incentive
Plan (the 2002 Plan and together with the 1994 Plan)
which provides for issuance of up to 1.4 million shares of
common stock in the aggregate, of which options to purchase all
of such shares had been granted as of the end of fiscal year
2005. The exercise price of an option granted under both the
1994 Plan and the 2002 Plan may not be less than the fair market
value of the underlying shares of Common Stock on the date of
grant, and employee options generally expire at the earlier of
termination of employment or ten years from the date of grant.
All options covered under the Plans were fully vested as of the
end of fiscal year 2005.
On March 30, 2010, the Board of Directors approved, subject
to stockholder approval, the Jos. A. Bank Clothiers, Inc. 2010
Equity Incentive Plan (the 2010 Plan). The 2010 Plan
was approved by stockholders at the Companys 2010 annual
meeting of stockholders on June 17, 2010.
The principal purposes of the 2010 Plan are to promote the
interests of the Company and its stockholders by providing
employees, directors and consultants with appropriate incentives
and rewards to encourage them to enter into and continue in the
employ or service of the Company or its subsidiaries, to acquire
a proprietary interest in the long-term success of the Company
and to reward the performance of individuals in fulfilling their
personal responsibilities for long-range and annual
achievements. In addition, the 2010 Plan permits the Company to
grant performance-based compensation within the
meaning of Section 162(m) of the Internal Revenue Code
(Section 162(m)), thereby preserving the
Companys ability to receive federal income tax deductions
for those awards to the extent that they in fact comply with
that Code section. The 2010 Plan reserves 1.5 million
shares of the Companys common stock for issuance pursuant
to awards to be granted under the plan. Under the 2010 Plan, the
Company may grant stock options, stock appreciation rights,
restricted stock, restricted stock units and stock and
cash-based awards.
The aggregate number of shares of Common Stock as to which
awards may be granted under any of the Plans, the number of
shares of Common Stock covered by each outstanding award under
the Plans and the exercise price per share of Common Stock in
each outstanding award, are to be proportionately adjusted for
any increase or decrease in the number of issued shares of
Common Stock resulting from a subdivision or consolidation of
shares or other capital adjustment, or the payment of a stock
dividend or other increase or decrease in such shares, effected
without receipt of consideration by the Company, or other change
in corporate or capital structure; provided, however, that any
fractional shares resulting from any such adjustment are to be
eliminated.
On March 30, 2010, the Board of Directors also approved the
Jos. A. Bank Clothiers, Inc. 2010 Deferred Compensation Plan
(the Deferred Compensation Plan). The Deferred
Compensation Plan is a nonqualified, unfunded plan designed to
provide a select group of the Companys senior management
(which includes each of the named executive officers) and highly
compensated employees, and non-employee directors, with the
opportunity to accumulate Company shares (through stock units)
by deferring compensation on a pre-tax basis, and to provide the
Company with a method of rewarding and retaining these
individuals by providing them with a means to defer receipt of
cash and shares of common stock associated future grants of
restricted stock units, performance share awards and certain
other cash- and stock-based awards. The Deferred Compensation
Plan reserves 4.5 million shares of the Companys
common stock for issuance pursuant to distributions under the
plan. At January 29, 2011, 2,100 stock units were
outstanding under this plan.
F-18
JOS. A.
BANK CLOTHIERS, INC.
NOTES TO
CONSOLIDATED FINANCIAL
STATEMENTS (Continued)
Changes in options outstanding that were issued under the 1994
and 2002 Plans were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fiscal Year 2008
|
|
|
Fiscal Year 2009
|
|
|
Fiscal Year 2010
|
|
|
|
|
|
|
Weighted
|
|
|
|
|
|
Weighted
|
|
|
|
|
|
Weighted
|
|
|
|
|
|
|
Average
|
|
|
|
|
|
Average
|
|
|
|
|
|
Average
|
|
|
|
|
|
|
Exercise
|
|
|
|
|
|
Exercise
|
|
|
|
|
|
Exercise
|
|
|
|
Shares
|
|
|
Price
|
|
|
Shares
|
|
|
Price
|
|
|
Shares
|
|
|
Price
|
|
|
|
(In thousands, except per share information)
|
|
|
Outstanding at beginning of year
|
|
|
659
|
|
|
$
|
6.88
|
|
|
|
491
|
|
|
$
|
6.10
|
|
|
|
401
|
|
|
$
|
6.89
|
|
Granted
|
|
|
|
|
|
$
|
|
|
|
|
|
|
|
$
|
|
|
|
|
|
|
|
$
|
|
|
Exercised
|
|
|
(168
|
)
|
|
$
|
9.17
|
|
|
|
(90
|
)
|
|
$
|
2.59
|
|
|
|
(96
|
)
|
|
$
|
10.57
|
|
Canceled
|
|
|
|
|
|
$
|
|
|
|
|
|
|
|
$
|
|
|
|
|
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Outstanding at end of year
|
|
|
491
|
|
|
$
|
6.10
|
|
|
|
401
|
|
|
$
|
6.89
|
|
|
|
305
|
|
|
$
|
5.73
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
.
The following table summarizes information about stock options
outstanding and exercisable as of January 29, 2011 that
were issued under the 1994 and 2002 Plans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Options Outstanding
|
|
|
Options Exercisable
|
|
|
|
|
|
|
Weighted
|
|
|
Weighted
|
|
|
|
|
|
Weighted
|
|
|
|
|
|
|
Average
|
|
|
Average
|
|
|
|
|
|
Average
|
|
|
|
|
|
|
Remaining
|
|
|
Exercise
|
|
|
|
|
|
Exercise
|
|
|
|
Number
|
|
|
Contractual
|
|
|
Price per
|
|
|
Number
|
|
|
Price per
|
|
Range of Exercise Prices
|
|
Outstanding
|
|
|
Life per Share
|
|
|
Share
|
|
|
Exercisable
|
|
|
Share
|
|
|
|
(In thousands, except per share and year information)
|
|
|
$0 - $5.00
|
|
|
103
|
|
|
|
1.12
|
|
|
$
|
3.06
|
|
|
|
103
|
|
|
$
|
3.06
|
|
$5.01 - $10.00
|
|
|
191
|
|
|
|
2.10
|
|
|
$
|
6.57
|
|
|
|
191
|
|
|
$
|
6.57
|
|
$15.01 - $20.00
|
|
|
11
|
|
|
|
4.27
|
|
|
$
|
16.18
|
|
|
|
11
|
|
|
$
|
16.18
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
305
|
|
|
|
1.85
|
|
|
$
|
5.73
|
|
|
|
305
|
|
|
$
|
5.73
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
During fiscal year 2010, the Company granted 86,100 restricted
stock units (RSUs) (representing whole units) under
the 2010 Plan to certain of its officers and to the members of
the Board of Directors at a weighted-average grant date fair
value of $39.72 and an aggregate fair value of approximately
$3.4 million. The grant date fair value is based on the
shares granted and the quoted price of the Companys common
stock on the date of grant. The grants to the officers are
intended to qualify under Section 162(m).
A summary of our nonvested RSU activity during fiscal 2010 is
presented below:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-Average
|
|
|
|
|
|
|
Grant-Date Fair
|
|
Nonvested Awards
|
|
Shares
|
|
|
Value
|
|
|
|
(In thousands, except per share information)
|
|
|
Nonvested at January 30, 2010
|
|
|
|
|
|
$
|
|
|
Granted
|
|
|
86
|
|
|
$
|
39.72
|
|
Vested
|
|
|
|
|
|
$
|
|
|
Forfeited
|
|
|
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
Nonvested at January 29, 2011
|
|
|
86
|
|
|
$
|
39.72
|
|
|
|
|
|
|
|
|
|
|
As of January 29, 2011, there was unrecognized compensation
expense related to nonvested RSUs of approximately
$2.3 million which is expected to be recognized over a
weighted average period of 2.1 years. As of
January 29, 2011, the intrinsic value of nonvested RSUs was
$3.6 million based on a share price of $41.95.
F-19
JOS. A.
BANK CLOTHIERS, INC.
NOTES TO
CONSOLIDATED FINANCIAL
STATEMENTS (Continued)
ASC 718 changes the presentation of realized excess tax benefits
associated with the exercise of stock options or the issuance of
other equity awards in the statements of cash flows. Excess tax
benefits are realized tax benefits from tax deductions for the
exercise of stock options or the issuance of other awards in
excess of the deferred tax asset attributable to stock
compensation expense for such equity awards. Prior to the
adoption of ASC 718, such realized tax benefits were
required to be presented as operating cash flows. ASC 718
requires such realized tax benefits to be presented as part of
cash flows from financing activities. For fiscal years 2008,
2009 and 2010, tax benefits realized from stock equity awards
totaled $0.6 million $0.1 million and
$1.3 million, respectively.
The Company maintains a Rights Agreement in which preferred
stock purchase rights (Rights) were distributed as a
dividend at the rate of one Right for each share of the
Companys outstanding Common Stock held as of the close of
business on September 20, 2007. This Rights Agreement
replaced a similar agreement which expired on September 19,
2007. The number of Rights associated with each share of the
Companys Common Stock will be proportionally adjusted in
connection with any stock split or stock dividends issued by the
Company in accordance with the Rights Agreement. In addition,
the Rights Agreement provides that at the time Rights
certificates evidencing the Rights are to be issued, the Company
will not be required to issue Rights certificates that evidence
fractional Rights. In lieu of such fractional Rights, the
Company will pay to the persons to which fractional Rights would
otherwise be issuable, an amount in cash equal to the fraction
of the market value of a whole Right.
Each Right will entitle stockholders to buy one 1/100th of a
share of Series A Junior Participating Preferred Stock of
Jos. A. Bank at an exercise price of $200. The Rights will be
exercisable only if a person or group acquires beneficial
ownership of 20 percent or more of the Companys
outstanding Common Stock (without the approval of the board of
directors) or commences a tender or exchange offer upon
consummation of which a person or group would beneficially own
20 percent or more of the Companys outstanding Common
Stock.
If any person becomes the beneficial owner of 20 percent or
more of the Companys outstanding common stock (without the
approval of the board of directors), or if a holder of
20 percent or more of the Companys Common Stock
engaged in certain self-dealing transactions or a merger
transaction in which the Company is the surviving corporation
and its Common Stock remains outstanding, then each Right not
owned by such person or certain related parties will entitle its
holder to purchase, at the Rights then-current exercise
price, units of the Companys Series A Junior
Participating Preferred Stock (or, in certain circumstances,
Common Stock, cash, property or other securities of the Company)
having a market value equal to twice the then-current exercise
price of the Rights. In addition, if the Company is involved in
a merger or other business combination transaction with another
person after which its Common Stock does not remain outstanding,
or sells 50 percent or more of its assets or earning power
to another person, each Right will entitle its holder to
purchase, at the Rights then-current exercise price,
shares of common stock of such other person having a market
value equal to twice the then-current exercise price of the
Rights. The Company will generally be entitled to redeem the
Rights at $0.01 per Right at any time prior to the earlier of
(i) such time that a person has become an Acquiring Person
or (ii) the Final Expiration Date.
The Company has two reportable segments: Stores and Direct
Marketing. The Stores segment includes all Company-owned stores
excluding Outlet and Factory stores (Full-line
stores). The Direct Marketing segment includes catalog and
Internet. While each segment offers a similar mix of mens
clothing to the retail customer, the Stores segment also
provides complete alterations, while the Direct Marketing
segment provides certain limited alterations.
F-20
JOS. A.
BANK CLOTHIERS, INC.
NOTES TO
CONSOLIDATED FINANCIAL
STATEMENTS (Continued)
The accounting policies of the segments are the same as those
described in the summary of significant policies. The Company
evaluates performance of the segments based on four
wall contribution, which excludes any allocation of
overhead from the corporate office and the distribution centers
(except order fulfillment costs which are allocated to Direct
Marketing), interest and income taxes.
The Companys segments are strategic business units that
offer similar products to the retail customer by two
distinctively different methods. In the Stores segment, the
typical customer travels to the store and purchases mens
clothing
and/or
alterations and takes their purchases with them. The Direct
Marketing customer receives a catalog in his or her home
and/or
office
and/or
visits our Internet web site and places an order by phone, mail,
fax or online. The merchandise is then shipped to the customer.
Segment data is presented in the following table:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Direct
|
|
|
Corporate
|
|
|
|
|
Fiscal Year 2008
|
|
Stores
|
|
|
Marketing
|
|
|
and Other
|
|
|
Total
|
|
|
|
(In thousands)
|
|
|
Net sales(a)
|
|
$
|
623,095
|
|
|
$
|
61,177
|
|
|
$
|
11,636
|
|
|
$
|
695,908
|
|
Depreciation and amortization
|
|
|
18,098
|
|
|
|
75
|
|
|
|
2,436
|
|
|
|
20,609
|
|
Operating income (loss)(b)
|
|
|
129,677
|
|
|
|
24,532
|
|
|
|
(58,720
|
)
|
|
|
95,489
|
|
Capital expenditures(c)
|
|
|
33,669
|
|
|
|
36
|
|
|
|
1,400
|
|
|
|
35,105
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Direct
|
|
|
Corporate
|
|
|
|
|
Fiscal Year 2009
|
|
Stores
|
|
|
Marketing
|
|
|
and Other
|
|
|
Total
|
|
|
|
(In thousands)
|
|
|
Net sales(a)
|
|
$
|
689,408
|
|
|
$
|
68,640
|
|
|
$
|
12,268
|
|
|
$
|
770,316
|
|
Depreciation and amortization
|
|
|
19,613
|
|
|
|
213
|
|
|
|
2,556
|
|
|
|
22,382
|
|
Operating income (loss)(b)
|
|
|
155,190
|
|
|
|
27,445
|
|
|
|
(65,232
|
)
|
|
|
117,403
|
|
Capital expenditures(c)
|
|
|
12,360
|
|
|
|
2,077
|
|
|
|
1,896
|
|
|
|
16,333
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Direct
|
|
|
Corporate
|
|
|
|
|
Fiscal Year 2010
|
|
Stores
|
|
|
Marketing
|
|
|
and Other
|
|
|
Total
|
|
|
|
(In thousands)
|
|
|
Net sales(a)
|
|
$
|
754,342
|
|
|
$
|
85,410
|
|
|
$
|
18,376
|
|
|
$
|
858,128
|
|
Depreciation and amortization
|
|
|
20,786
|
|
|
|
558
|
|
|
|
3,135
|
|
|
|
24,479
|
|
Operating income (loss)(b)
|
|
|
182,659
|
|
|
|
31,870
|
|
|
|
(72,922
|
)
|
|
|
141,607
|
|
Capital expenditures(c)
|
|
|
19,340
|
|
|
|
1,244
|
|
|
|
8,768
|
|
|
|
29,352
|
|
|
|
|
(a) |
|
Stores net sales represent all Full-line store sales. Direct
Marketing net sales represent catalog call center and Internet
sales. Net sales from segments below the GAAP quantitative
thresholds are attributable primarily to three operating
segments of the Company. Those segments are Outlet and Factory
stores, Franchise stores and regional tailor shops. None of
these segments have ever met any of the quantitative thresholds
for determining reportable segments and are included in
Corporate and Other. |
|
(b) |
|
Operating income (loss) for the Stores and Direct Marketing
segments represents profit before allocations of overhead from
the corporate office and the distribution centers, interest and
income taxes. Total Company shipping costs to customers of
approximately $8.8 million, $9.7 million and
$13.0 million for fiscal years 2008, 2009 and 2010,
respectively, were recorded to Sales and marketing,
including occupancy costs in the Consolidated Statements
of Income. Operating income (loss) for Corporate and
Other consists primarily of costs included in general and
administrative costs. Total operating income represents profit
before interest and income taxes. |
|
(c) |
|
Capital expenditures include payments of property, plant and
equipment made for the reportable segment. |
F-21
JOS. A.
BANK CLOTHIERS, INC.
NOTES TO
CONSOLIDATED FINANCIAL
STATEMENTS (Continued)
|
|
13.
|
RELATED
PARTY TRANSACTIONS:
|
On September 9, 2008, the Company and Robert N. Wildrick,
our current Chairman of the Board, entered into a Consulting
Agreement (the Consulting Agreement) pursuant to
which the Company retained Mr. Wildrick to consult on
matters of strategic planning and initiatives for a term of
three years commencing February 1, 2009 at a fee of
$0.8 million per year. On November 30, 2010, those
members of the Board who are independent directors
in accordance with the Nasdaq Stock Market Rules met in
executive session and approved an amendment to the Consulting
Agreement. As the amendment constitutes a related party
transaction, generally the Audit Committee would have been
responsible for evaluating the transaction. The Board instead
met in executive session in order to increase the number of
independent directors who participated in the decision. The
First Amendment to Consulting Agreement extends the term of the
Consulting Agreement to January 26, 2014. All other terms
of the Consulting Agreement remain unchanged.
|
|
14.
|
QUARTERLY
FINANCIAL INFORMATION (Unaudited):
|
Summarized quarterly financial information in fiscal years 2009
and 2010 as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
First
|
|
|
Second
|
|
|
Third
|
|
|
Fourth
|
|
|
|
|
|
|
Quarter
|
|
|
Quarter
|
|
|
Quarter
|
|
|
Quarter
|
|
|
Total
|
|
|
|
(In thousands, except per share information)
|
|
|
Fiscal Year 2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
$
|
161,925
|
|
|
$
|
167,735
|
|
|
$
|
161,309
|
|
|
$
|
279,347
|
|
|
$
|
770,316
|
|
Gross profit
|
|
|
98,454
|
|
|
|
103,177
|
|
|
|
100,807
|
|
|
|
169,685
|
|
|
|
472,123
|
|
Operating income
|
|
|
18,849
|
|
|
|
20,682
|
|
|
|
19,314
|
|
|
|
58,558
|
|
|
|
117,403
|
|
Net income
|
|
|
11,455
|
|
|
|
12,512
|
|
|
|
11,728
|
|
|
|
35,460
|
|
|
|
71,155
|
|
Diluted income per common share
|
|
$
|
0.41
|
|
|
$
|
0.45
|
|
|
$
|
0.42
|
|
|
$
|
1.28
|
|
|
$
|
2.56
|
|
Fiscal Year 2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
$
|
178,125
|
|
|
$
|
188,412
|
|
|
$
|
173,268
|
|
|
$
|
318,323
|
|
|
$
|
858,128
|
|
Gross profit
|
|
|
113,316
|
|
|
|
118,330
|
|
|
|
110,839
|
|
|
|
195,058
|
|
|
|
537,543
|
|
Operating income
|
|
|
26,061
|
|
|
|
27,407
|
|
|
|
20,457
|
|
|
|
67,682
|
|
|
|
141,607
|
|
Net income
|
|
|
15,808
|
|
|
|
16,479
|
|
|
|
12,563
|
|
|
|
40,949
|
|
|
|
85,799
|
|
Diluted income per common share
|
|
$
|
0.57
|
|
|
$
|
0.59
|
|
|
$
|
0.45
|
|
|
$
|
1.47
|
|
|
$
|
3.08
|
|
F-22
Pursuant to the requirements of Section 13 or l5(d) of the
Securities Exchange Act of 1934, the registrant has duly caused
this Report to be signed on its behalf by the undersigned,
thereunto duly authorized.
JOS. A. BANK CLOTHIERS, INC.
(registrant)
R. NEAL BLACK
PRESIDENT AND CHIEF
EXECUTIVE OFFICER
Date: March 30, 2011
Pursuant to the requirements of the Securities Exchange Act of
1934, this Report has been signed below by the following persons
in the capacities and on the dates indicated.
|
|
|
|
|
|
|
Name
|
|
Title
|
|
Date
|
|
|
|
|
|
|
/s/ R.
NEAL BLACK
|
|
Director, President and Chief Executive Officer (Principal
Executive Officer)
|
|
March 30, 2011
|
|
|
|
|
|
/s/ DAVID
E. ULLMAN
|
|
Executive Vice President, Chief Financial Officer (Principal
Financial Officer and Principal Accounting Officer)
|
|
March 30, 2011
|
|
|
|
|
|
/s/ ROBERT
N. WILDRICK
|
|
Director, Chairman of the Board
|
|
March 30, 2011
|
|
|
|
|
|
/s/ ANDREW
A. GIORDANO
|
|
Director, Chairman Emeritus and Lead Independent Director
|
|
March 30, 2011
|
|
|
|
|
|
/s/ JAMES
H. FERSTL
|
|
Director
|
|
March 30, 2011
|
|
|
|
|
|
/s/ WILLIAM
E. HERRON
|
|
Director
|
|
March 30, 2011
|
|
|
|
|
|
/s/ HENRY
HOMES, III
|
|
Director
|
|
March 30, 2011
|
|
|
|
|
|
/s/ SIDNEY
H. RITMAN
|
|
Director
|
|
March 30, 2011
|
Exhibits Index
|
|
|
|
|
|
|
|
3
|
.1
|
|
|
|
Certificate of Amendment of the Restated Certificate of
Incorporation of the Company and the Restated Certificate of
Incorporation of the Company.*(9)
|
|
3
|
.2
|
|
|
|
Amended and Restated By-Laws of the Company as of February 24,
2011.*(23)
|
|
4
|
.1
|
|
|
|
Form of Common Stock certificate.*(1)
|
|
4
|
.2
|
|
|
|
Rights Agreement, dated as of September 6, 2007, including
Exhibit B thereto (the form of Right Certificate).*(10)
|
|
4
|
.3
|
|
|
|
Certificate Eliminating Reference to Series A Preferred Stock
from Restated Certificate of Incorporation of Company.*(11)
|
|
4
|
.4
|
|
|
|
Certificate of Designation of Series A Junior Participating
Preferred Stock.*(11)
|
|
10
|
.1
|
|
|
|
1994 Incentive Plan.*(1)
|
|
10
|
.1(a)
|
|
|
|
Amendments, dated as of October 6, 1997, to Incentive
Plan.*(2)
|
|
10
|
.2
|
|
|
|
Summary of 2010 and 2011 Cash and Equity Incentive
Programs.*(24)
|
|
10
|
.3
|
|
|
|
Amended and Restated Employment Agreement, dated as of May 15,
2002, between David E. Ullman and Jos. A. Bank Clothiers,
Inc.*(5)
|
|
10
|
.3(a)
|
|
|
|
Fifth Amendment, dated as of April 9, 2008, to Amended and
Restated Employment Agreement, dated as of May 15, 2002, by and
between David E. Ullman and Jos. A. Bank Clothiers,
Inc.*(12)
|
|
10
|
.3(b)
|
|
|
|
Sixth Amendment, dated as of April 7, 2009, to Amended and
Restated Employment Agreement, dated as of May 15, 2002, by and
between David E. Ullman and Jos. A. Bank Clothiers,
Inc.*(15)
|
|
10
|
.3(c)
|
|
|
|
Seventh Amendment, dated as of March 30, 2010, to Amended and
Restated Employment Agreement, dated as of May 15, 2002, by and
between David E. Ullman and Jos. A. Bank Clothiers,
Inc.*(18)
|
|
10
|
.3(d)
|
|
|
|
Eighth Amendment, dated as of December 28, 2010, to Amended and
Restated Employment Agreement, dated as of May 15, 2002, by and
between David E. Ullman and Jos. A. Bank Clothiers,
Inc.*(22)
|
|
10
|
.3(e)
|
|
|
|
Ninth Amendment, dated as of March 29, 2011, to Amended and
Restated Employment Agreement, dated as of May 15, 2002, by and
between David E. Ullman and Jos. A. Bank Clothiers,
Inc.*(24)
|
|
10
|
.4
|
|
|
|
Jos. A. Bank Clothiers, Inc. Nonqualified Deferred Compensation
Trust Agreement, dated January 20, 2004.*(8)
|
|
10
|
.5
|
|
|
|
Employment Agreement, dated as of January 30, 2009, between
James W. Thorne and Jos. A. Bank Clothiers, Inc.*(15)
|
|
10
|
.5(a)
|
|
|
|
First Amendment, dated as of March 30, 2010, to Employment
Agreement dated as of January 30, 2009, between James W.
Thorne and Jos. A. Bank Clothiers, Inc.*(18)
|
|
10
|
.5(b)
|
|
|
|
Second Amendment, dated as of December 28, 2010, to Employment
Agreement dated as of January 30, 2009, between James W. Thorne
and Jos. A. Bank Clothiers, Inc.*(22)
|
|
10
|
.5(c)
|
|
|
|
Third Amendment, dated as of March 29, 2011, to Employment
Agreement dated as of January 30, 2009, between James W.
Thorne and Jos. A. Bank Clothiers, Inc.*(24)
|
|
10
|
.6
|
|
|
|
Amended and Restated Employment Agreement, dated May 15, 2002,
by and between Charles D. Frazer and Jos. A. Bank Clothiers,
Inc.*(5)
|
|
10
|
.6(a)
|
|
|
|
Fifth Amendment, dated as of April 9, 2008, to Amended and
Restated Employment Agreement, dated as of May 15, 2002, by and
between Charles D. Frazer and Jos. A. Bank Clothiers,
Inc.*(12)
|
|
10
|
.6(b)
|
|
|
|
Sixth Amendment, dated as of April 7, 2009, to Amended and
Restated Employment Agreement, dated as of May 15, 2002, by and
between Charles D. Frazer and Jos. A. Bank Clothiers,
Inc.*(15)
|
|
10
|
.6(c)
|
|
|
|
Seventh Amendment, dated as of June 17, 2010, to Amended and
Restated Employment Agreement, dated as of May 15, 2002, by and
between Charles D. Frazer and Jos. A. Bank Clothiers,
Inc.*(20)
|
|
|
|
|
|
|
|
|
10
|
.6(d)
|
|
|
|
Eighth Amendment, dated as of December 28, 2010, to Amended and
Restated Employment Agreement, dated as of May 15, 2002, by and
between Charles D. Frazer and Jos. A. Bank Clothiers,
Inc.*(22)
|
|
10
|
.6(e)
|
|
|
|
Ninth Amendment, dated as of March 29, 2011, to Amended and
Restated Employment Agreement, dated as of May 15, 2002, by and
between Charles D. Frazer and Jos. A. Bank Clothiers,
Inc.*(24)
|
|
10
|
.7
|
|
|
|
Employment Agreement, dated as of November 1, 1999, between
Robert N. Wildrick and Jos. A. Bank Clothiers, Inc.*(3)
|
|
10
|
.7(a)
|
|
|
|
Fourth Amendment, dated as of September 9, 2008, to Employment
Agreement, dated as of November 1, 1999, by and between Robert
N. Wildrick and Jos. A. Bank Clothiers, Inc.*(14)
|
|
10
|
.7(b)
|
|
|
|
Consulting Agreement, dated as of September 9, 2008, between
Robert N. Wildrick and Jos. A. Bank Clothiers, Inc.*(14)
|
|
10
|
.7(c)
|
|
|
|
First Amendment, dated as of November 30, 2010, to Consulting
Agreement, dated as of September 9, 2008, between Robert N.
Wildrick and Jos. A. Bank Clothiers, Inc.*(21)
|
|
10
|
.8
|
|
|
|
Employment Agreement, dated as of November 30, 1999, by and
between Robert Hensley and Jos. A. Bank Clothiers, Inc.*(3)
|
|
10
|
.8(a)
|
|
|
|
First Amendment, dated as of January 1, 2000, to Employment
Agreement, dated as of November 30, 1999, by and between Robert
Hensley and Jos. A. Bank Clothiers, Inc.*(4)
|
|
10
|
.8(b)
|
|
|
|
Fourth Amendment, dated as of May 28, 2002, to Employment
Agreement, dated as of November 30, 1999, by and between Robert
Hensley and Jos. A. Bank Clothiers, Inc.*(5)
|
|
10
|
.8(c)
|
|
|
|
Ninth Amendment, dated as of April 9, 2008, to Employment
Agreement, dated as of November 30, 1999, by and between
Robert Hensley and Jos. A. Bank Clothiers, Inc.*(12)
|
|
10
|
.8(d)
|
|
|
|
Tenth Amendment, dated as of April 7, 2009, to Employment
Agreement, dated as of November 30, 1999, by and between
Robert Hensley and Jos. A. Bank Clothiers, Inc.*(15)
|
|
10
|
.8(e)
|
|
|
|
Eleventh Amendment, dated as of March 30, 2010, to Employment
Agreement, dated as of November 30, 1999, by and between Robert
Hensley and Jos. A. Bank Clothiers, Inc.*(18)
|
|
10
|
.8(f)
|
|
|
|
Twelfth Amendment, dated as of December 28, 2010, to Employment
Agreement, dated as of November 30, 1999, by and between Robert
Hensley and Jos. A. Bank Clothiers, Inc.*(22)
|
|
10
|
.8(g)
|
|
|
|
Thirteenth Amendment, dated as of March 29, 2011, to Employment
Agreement, dated as of November 30, 1999, by and between Robert
Hensley and Jos. A. Bank Clothiers, Inc.*(24)
|
|
10
|
.9
|
|
|
|
Amended and Restated Employment Agreement, dated as of August
30, 2010, by and between R. Neal Black and Jos. A. Bank
Clothiers, Inc.*(20)
|
|
10
|
.10
|
|
|
|
Employment offer letter, dated November 20, 2000, from Jos. A.
Bank Clothiers, Inc. to Jerry DeBoer.*(4)
|
|
10
|
.10(a)
|
|
|
|
Written description of 2011 base salary for Jerry
DeBoer.*(24)
|
|
10
|
.10(b)
|
|
|
|
Amendment to Employment Offer Letter, dated as of December 28,
2010, by and between Jerry DeBoer and Jos. A. Bank
Clothiers, Inc.*(22)
|
|
10
|
.11
|
|
|
|
Employment Agreement, dated as of June 3, 2008, between Gary
Merry and Jos. A. Bank Clothiers, Inc.*(13)
|
|
10
|
.11(a)
|
|
|
|
First Amendment, dated as of April 7, 2009 to Employment
Agreement, dated as of June 3, 2008, by and between Gary Merry
and Jos. A. Bank Clothiers, Inc.*(15)
|
|
10
|
.11(b)
|
|
|
|
Second Amendment, dated as of March 30, 2010 to Employment
Agreement, dated as of June 3, 2008, by and between Gary Merry
and Jos. A. Bank Clothiers, Inc.*(18)
|
|
10
|
.11(c)
|
|
|
|
Third Amendment, dated as of December 28, 2010 to Employment
Agreement, dated as of June 3, 2008, by and between Gary
Merry and Jos. A. Bank Clothiers, Inc.*(22)
|
|
10
|
.11(d)
|
|
|
|
Fourth Amendment, dated as of March 29, 2011 to Employment
Agreement, dated as of June 3, 2008, by and between Gary Merry
and Jos. A. Bank Clothiers, Inc.*(24)
|
|
10
|
.12
|
|
|
|
2002 Long-Term Incentive Plan.*(6)
|
|
10
|
.13
|
|
|
|
Form of stock option agreement under the 2002 Long-Term
Incentive Plan.*(7)
|
|
10
|
.14
|
|
|
|
Collective Bargaining Agreement, dated March 1, 2009, by and
between Joseph A. Bank Mfg. Co., Inc. and Mid-Atlantic Regional
Joint Board, Local 806.*(18)
|
|
10
|
.15
|
|
|
|
Form of Officer and Director Indemnification
Agreement.*(17)
|
|
|
|
|
|
|
|
|
10
|
.15(a)
|
|
|
|
Indemnification Agreement dated September 1, 2009 between JoS.
A. Bank Clothiers, Inc. and Robert N. Wildrick.*(17)
|
|
10
|
.15(b)
|
|
|
|
Indemnification Agreement dated September 1, 2009 between JoS.
A. Bank Clothiers, Inc. and Andrew A. Giordano.*(17)
|
|
10
|
.15(c)
|
|
|
|
Indemnification Agreement dated September 1, 2009 between JoS.
A. Bank Clothiers, Inc. and R. Neal Black.*(17)
|
|
10
|
.15(d)
|
|
|
|
Indemnification Agreement dated September 1, 2009 between JoS.
A. Bank Clothiers, Inc. and James H. Ferstl.*(17)
|
|
10
|
.15(e)
|
|
|
|
Indemnification Agreement dated September 1, 2009 between JoS.
A. Bank Clothiers, Inc. and Gary S. Gladstein.*(17)
|
|
10
|
.15(f)
|
|
|
|
Indemnification Agreement dated September 1, 2009 between JoS.
A. Bank Clothiers, Inc. and William E. Herron.*(17)
|
|
10
|
.15(g)
|
|
|
|
Indemnification Agreement dated September 1, 2009 between JoS.
A. Bank Clothiers, Inc. and Henry Homes, III.*(17)
|
|
10
|
.15(h)
|
|
|
|
Indemnification Agreement dated September 1, 2009 between JoS.
A. Bank Clothiers, Inc. and Sidney H. Ritman.*(17)
|
|
10
|
.15(i)
|
|
|
|
Indemnification Agreement dated September 1, 2009 between JoS.
A. Bank Clothiers, Inc. and David E. Ullman.*(17)
|
|
10
|
.15(j)
|
|
|
|
Indemnification Agreement dated August 30, 2010 between JoS. A.
Bank Clothiers, Inc. and Robert Hensley.*(20)
|
|
10
|
.15(k)
|
|
|
|
Indemnification Agreement dated August 30, 2010 between JoS. A.
Bank Clothiers, Inc. and Charles D. Frazer.*(20)
|
|
10
|
.16
|
|
|
|
JoS. A. Bank Clothiers, Inc. Executive Management Incentive
Plan.*(16)
|
|
10
|
.16(a)
|
|
|
|
Amendment to JoS. A. Bank Clothiers, Inc. Executive Management
Incentive Plan.*(18)
|
|
10
|
.17
|
|
|
|
JoS. A. Bank Clothiers, Inc. 2010 Deferred Compensation
Plan.*(18)
|
|
10
|
.18
|
|
|
|
JoS. A. Bank Clothiers, Inc. 2010 Equity Incentive
Plan.*(18)
|
|
10
|
.19
|
|
|
|
JoS. A. Bank Clothiers, Inc. 2010 Equity Incentive
Plan CEO Performance Restricted Stock Unit Award
Agreement, dated June 17, 2010, by and between JoS. A. Bank
Clothiers, Inc. and R. Neal Black.*(19)
|
|
10
|
.20
|
|
|
|
JoS. A. Bank Clothiers, Inc. 2010 Equity Incentive
Plan EVP Performance Restricted Stock Unit Award
Agreement.*(19)
|
|
10
|
.21
|
|
|
|
JoS. A. Bank Clothiers, Inc. 2010 Equity Incentive
Plan Non-Employee Director Restricted Stock Unit
2010 Award Agreement.*(19)
|
|
10
|
.22
|
|
|
|
JoS. A. Bank Clothiers, Inc. 2010 Equity Incentive
Plan Non-Employee Director Restricted Stock Unit
Annual Award Agreement.*(19)
|
|
10
|
.23
|
|
|
|
JoS. A. Bank Clothiers, Inc. 2010 Equity Incentive
Plan Non-Employee Director Restricted Stock Unit
Inaugural Award Agreement.*(19)
|
|
21
|
.1
|
|
|
|
Company subsidiaries.*(24)
|
|
23
|
.1
|
|
|
|
Consent of Deloitte & Touche LLP.*(24)
|
|
31
|
.1
|
|
|
|
Certification of Principal Executive Officer Pursuant to Section
302 of the Sarbanes-Oxley Act of 2002.*(24)
|
|
31
|
.2
|
|
|
|
Certification of Principal Financial Officer Pursuant to Section
302 of the Sarbanes-Oxley Act of 2002.*(24)
|
|
32
|
.1
|
|
|
|
Certification of Principal Executive Officer Pursuant to Section
906 of the Sarbanes-Oxley Act of 2002.*(24)
|
|
32
|
.2
|
|
|
|
Certification of Principal Financial Officer Pursuant to Section
906 of the Sarbanes-Oxley Act of 2002.*(24)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*(1)
|
|
|
|
Incorporated by reference to the Companys Registration
Statement on Form S-1 filed May 3, 1994.
|
*(2)
|
|
|
|
Incorporated by reference to the Companys Annual Report on
Form 10-K for the year ended January 31, 1998.
|
|
|
|
|
|
*(3)
|
|
|
|
Incorporated by reference to the Companys Quarterly Report
on Form 10-Q for the quarter ended October 30, 1999.
|
*(4)
|
|
|
|
Incorporated by reference to the Companys Annual Report on
Form 10-K for the year ended February 3, 2001.
|
*(5)
|
|
|
|
Incorporated by reference to the Companys Quarterly Report
on Form 10-Q for the quarter ended May 4, 2002.
|
*(6)
|
|
|
|
Incorporated by reference to the Companys Definitive Proxy
Statement on Schedule 14(A) filed May 20, 2002.
|
*(7)
|
|
|
|
Incorporated by reference to the Companys Current Report
on Form 8-K, dated April 7, 2005.
|
*(8)
|
|
|
|
Incorporated by reference to the Companys Annual Report on
Form 10-K for the year ended January 29, 2005.
|
*(9)
|
|
|
|
Incorporated by reference to Amendment No. 1 to the
Companys Quarterly Report on Form 10-Q for the quarter
ended July 29, 2006.
|
*(10)
|
|
|
|
Incorporated by reference to the Companys Current Report
on Form 8-K, dated September 6, 2007.
|
*(11)
|
|
|
|
Incorporated by reference to the Companys Current Report
on Form 8-K, dated September 20, 2007.
|
*(12)
|
|
|
|
Incorporated by reference to the Companys Annual Report on
Form 10-K for the year ended February 2, 2008.
|
*(13)
|
|
|
|
Incorporated by reference to the Companys Quarterly Report
on Form 10-Q for the quarter ended May 3, 2008.
|
*(14)
|
|
|
|
Incorporated by reference to the Companys Current Report
on Form 8-K, dated September 9, 2008.
|
*(15)
|
|
|
|
Incorporated by reference to the Companys Annual Report on
Form 10-K for the year ended January 31, 2009.
|
*(16)
|
|
|
|
Incorporated by reference to the Companys Current Report
on Form 8-K, dated June 18, 2009.
|
*(17)
|
|
|
|
Incorporated by reference to the Companys Quarterly Report
on Form 10-Q for the quarter ended August 1, 2009.
|
*(18)
|
|
|
|
Incorporated by reference to the Companys Annual Report on
Form 10-K for the year ended January 30, 2010.
|
*(19)
|
|
|
|
Incorporated by reference to the Companys Current Report
on Form 8-K, dated June 17, 2010.
|
*(20)
|
|
|
|
Incorporated by reference to the Companys Quarterly Report
on Form 10-Q for the quarter ended July 31, 2010.
|
*(21)
|
|
|
|
Incorporated by reference to the Companys Quarterly Report
on Form 10-Q for the quarter ended October 30, 2010.
|
*(22)
|
|
|
|
Incorporated by reference to the Companys Current Report
on Form 8-K, dated December 28, 2010.
|
*(23)
|
|
|
|
Incorporated by reference to the Companys Current Report
on Form 8-K, dated March 2, 2011.
|
*(24)
|
|
|
|
Filed herewith
|
|
|
|
|
Exhibit represents a management contract or compensatory plan or
arrangement.
|