This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Greenberg: If Jos. A Bank Gets Men's Wearhouse...

NEW YORK ( TheStreet) -- The one good thing about Jos. A Bank (JOSB) bidding for Men's Wearhouse (MW) is that it's a gift from the gods for Men's Wearhouse shareholders.

But for Bank? It looks like one of those situations where one wounded company tries to patch over its problems by acquiring a less-wounded competitor.

Both companies have been having a tough time, lately. Nevermind that Men's Wearhouse recently booted its founder, George Zimmer. Its sales have been up and down for well over a year, falling 2.3% last quarter.

Compare that with Bank's 10.7% decline following a 2.6% drop the quarter before.

More telling: While Bank's same-store sales tumbled by 15.9% last quarter, Men's Wearhouse's were down just 2.1%.

The story is the same throughout the Bank vs. Men's Wearhouse financial statements.

A deal like this might be fine if this were the case of a much stronger company acquiring a weaker competitor. But when a company whose business appears to be falling faster than its larger competitor -- whose stats (while not that good) are better -- it usually screams: Desperation.

Remember, everything appeared to be fine at Bank (steamrolling the shorts and skeptics, including yours truly on the skeptic side) as long as it was rapidly opening up new stores left and right. When that slowed, so did its growth.

In recent quarters the company has blamed its missteps on everything from sequestration to the weather and anything else that isn't nailed down. There's also the issue facing both companies: Demographics appears to be shifting away from the kind of clothing they sell.

The solution? Pull in a private equity firm, load up on even more debt and go after its bigger rival.

Reality: In the near-term, in my view, it helps distract from the issues that have caused Bank to badly miss and guide down for several straight quarters. Longer term: When you put two mongrels together you don't get a greyhound.

-- Written by Herb Greenberg in San Diego

Herb Greenberg, editor of Herb Greenberg's Reality Check, is a contributor to CNBC. He does not own shares, short or trade shares in an individual corporate security.


Chart of I:DJI
DOW 17,830.76 -210.79 -1.17%
S&P 500 2,075.81 -19.34 -0.92%
NASDAQ 4,805.2910 -57.85 -1.19%

Herb's Tweets

Select the service that is right for you!

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
Real Money Pro

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Trifecta Stocks

Trifecta Stocks analyzes over 4,000 equities weekly to find the elite 1% of stocks that pass rigorous quantitative, fundamental and technical tests.

Product Features:
  • Model portfolio
  • Trade alerts
  • Recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Growth Seeker

Chris Versace, using sophisticated stock screening and fundamental research, identifies potentially explosive small and mid-cap stocks.

Product Features:
  • Model portfolio
  • Small-cap and mid-cap focus
  • Intraday trade alerts
  • Weekly roundups
Daily Swing Trade

Master swing trader Alan Farley uses his sophisticated software screens to review thousands of stocks each day for you, to find just the handful that meet his demanding criteria.

Product Features:
  • Daily commentary and coaching on swing trading
  • Technical charts and analysis
Top Rated Stocks Top Rated Funds Top Rated ETFs