Today’s Man, Inc.
Today’s Man, Inc.
835 Lancer Drive
Moorestown, New Jersey 08057
Fax: (609) 235-9323
Web site: www.todaysman.com
Sales: $263.3 million (fiscal 1996, ended February 3)
Stock Exchanges: NASDAQ
SICs: 5611 Men’s and Boy’s Clothing Stores
Today’s Man, Inc. is a chain of men’s clothing stores that has a significant part of the market in the Philadelphia, New York City, and Washington, D.C. areas. Under its founder, chairman, and CEO David Feld, Today’s Man operates 25 retail stores in New Jersey, Maryland, Connecticut, New York, Pennsylvania, and Virginia. It is well-known as a pioneer in offering good quality tailored suits at a 30 to 40 percent discount compared to typical retail prices. With about 25,000 square feet, each Today’s Man superstore offers a wide selection of both brand name items and its own lower-cost private-brand labels, including Today’s Man, Brookcraft, and Torriani. In addition to suits, each store sells dress shirts, sport coats, ties, shoes, casual slacks and shirts, and most other accessories for white-collar men. Each Today’s Man store has its own staff of tailors.
Origins in the 1970s
In 1971 David Feld saw what he considered an unmet need in the men’s market for tailored clothing. Some upscale stores featured high prices and good quality, but they lacked an adequate assortment. At the other end of the spectrum, discount stores carried clothing with lower prices and lower quality.
Feld thought he could fill the void in the middle range for a good selection of clothing at reduced prices, so at the age of 23 he opened his first store in Philadelphia. That first 2,000-square-foot store opened on Third and Market Street.
David Feld had little experience to begin that first men’s clothing store. In 1950 his parents, survivors of the Jewish Holocaust, had brought their three-year-old son from West Germany to the United States. David grew up working in his parents’ retail clothing store in the Berlin Farmers Market in southern New Jersey. Feld started his own chain with white-collar males aged 25 to 54 in mind. Such men wore suits to work. “Our customer is in the middle of his career,” said Feld in a 1991 article in Discount Store News. ’Ten years ago he was buying cheap suits because it was all he could afford. Now he is looking for better quality, but he still wants the value.”
Although Today’s Man often has been described as a discount store, Feld has rejected that term. In a 1991 issue of the Daily News Record, he argued that Today’s Man defied traditional retail store labels. Because his chain was not large enough, it could not be called a mass merchandiser. And because top quality clothes were offered, the chain was not an off-pricer. Feld defined his chain as a “merchandise-dominant specialty retail store, carrying attractive, branded merchandise.”
Regardless of labels, the chain’s competitive prices were one reason for its success. By buying in bulk and well before items would be sold, Today’s Man was able to offer considerable savings on its suits and accessories. Prices remained constant, except for a few clearance sales a year.
By 1974 Today’s Man had annual sales of $8 million. In that year the firm expanded its men’s suit selections and opened its second Philadelphia store, located at City Line Avenue and 54th Street.
Expansion in the 1980s
Gradually Today’s Man opened larger stores. Thus in 1980 the company opened a 12,000-square-foot store at 1528 Chestnut Street in Philadelphia. Three years later the 18,000-square-foot store in the Lawrence Park Shopping Center in Broomall, Pennsylvania, was opened to the public. To make its merchandisc more accessible, the Broomall store used a “race-track” floor plan which placed all items within a few steps of a continuous aisle. Today’s Man’s annual sales reached $13 million in 1983.
The firm considered its Broomall store to be its first “superstore,” although the size of such operations gradually increased. By learning from superstores in other fields, such as Toys “R” Us, Home Depot, and Circuit City, Feld found he could apply those lessons to market men’s attire.
In 1984 four additional superstores began in Cherry Hill and Deptford, New Jersey, and in Montgomery ville and Allen town, Pennsylvania. In 1986 the company decided that all new superstores would be at least 25,000 square feet.
To increase sales by giving men the opportunity to buy clothes by one-stop shopping, the firm in 1984 expanded its choice of furnishings, such as ties and shoes. It also began offering sportswear, including casual slacks, sweaters, and sport shirts.
In 1986 the company began selling its own private brand merchandise. Sold under the labels Today’s Man, Brookcraft, Torriani, Lamerti, and Amherst and Brock, such items represented a company strategy to keep prices down. About one-third of all its clothing was private label. To keep up with expanding sales, in 1987 Today’s Man built a new office complex and distribution center in Moorestown, New Jersey.
The firm entered the Washington, D.C., area market for the first time in 1988 when superstores were opened in Rockville, Maryland, and Bailey’s Crossroads, Virginia. The same year, two other superstores began operating in King of Prussia, Pennsylvania, and in Langhorne, Pennsylvania. In 1988 Today’s Man began promoting its own credit card, and at the end of the year the company celebrated reaching $50 million in sales.
This expansion was facilitated by computers. In 1985 the company bought a Honeywell minicomputer to hook up to the firm’s electronic cash registers. That was a step in the right direction, but each transaction had to be keyed into the system. That very labor-intensive method resulted in pricing errors and other discrepancies. So in 1987 the company decided to modernize and purchase a point-of-sale (POS) system mainly from Post-Tron Systems of Providence, Rhode Island. The new system integrated the firm’s Honeywell minicomputer and its electronic cash registers with a modified IBM AT computer at each store. This hardware coupled with customized software allowed clerks to use bar codes for automatic pricing and thus not have to type in so much sales data. The new technology also reduced time for training cashiers, an important factor because of the frequent turnover of cashiers.
Good and Bad Times in the 1990s
By 1990 Today’s Man had converted all its existing stores to superstores and sales had reached $100 million. The firm entered its main market when it opened two new superstores in the New York City area in 1991. In March the Paramus, New Jersey store opened, the company’s 13th store with 30,000 square feet. Later in the year, a similar size store in Carle Place on Long Island began greeting customers with great selections such as 20,000 ties and 50 sizes of men’s suits. This expansion into the New York City market led to an increase in its Moorestown, New Jersey office/warehouse from 60,000 to 100,000 square feet.
To continue expanding, raise working capital, and pay some debts, Today’s Man became a public corporation in 1992. Its stock prospectus described the average superstore as having about 25,000 square feet with the following merchandise: 8,000 men’s suits, 3,000 sports coats, 15,000 ties, 15,000 dress shirts, and 10,000 pairs of casual or dress pants.
Underwritten by Paine Webber and Alex, Brown & Sons, the firm in June 1992 offered its stock (symbol TMAN) on the NASDAQ Exchange for $7.50 per share. The same month, Men’s Warehouse, considered by Today’s Man to be its main competitor, came out with its IPO (initial public offering). Both enjoyed a substantial rise in their stock prices by December.
In 1992 Today’s Man opened three new stores. Its Wayne, New Jersey store was the second in that state. The Stony Brook store expanded the company’s efforts in the New York City area. The company also added a Fairfax, Virginia store, its third in the Washington, D.C. area.
Today’s Man welcomed the public to several new stores in the New York City area between 1993 and 1995. When asked about this concentration in or near the Big Apple, president David Feld in the August 27, 1993 issue of Daily News Record replied, “They asked Willie Sutton why he robs banks and he said, That’s where the money is.’ New York has the money and the biggest population [in] the country. Men who live there spend the most money spent on clothing.” So in 1993 the company opened stores in Woodbridge, New Jersey; Staten Island; and Manhasset, New York.
In May 1993 Today’s Man came out with its second stock offering of 2 million common shares, 1.38 million shares to be sold by the company and the remaining 620,000 shares to be sold by existing stockholders. Following the secondary offering, the firm had 10.7 million shares outstanding.
In March 1994 the company opened its first store in New York City: the 28,000-square-foot Chelsea store at 625 Sixth Avenue and 19th Street. The second New York City store opened in September at Broadway and 81st Street on Manhattan’s Upper West Side.
The following spring Today’s Man began operations at its flagship Manhattan store at 529 5th Avenue at the intersection of 44th Street. The company leased the two-story 25,000-square-foot building from Silverstein Properties. David Feld reported that this prime location was chosen because of the area’s several hotels and other nearby men’s clothing retailers, including upscale Brooks Brothers and Paul Stuart stores. Feld said the reputation and magic of 5th Avenue also attracted his firm’s interest. In 1995, the chain added other new stores in Norwalk, Connecticut and Greenbelt, Maryland.
In the early 1990s, as Today’s Man entered the New York City area, it did well financially. For example, its sales increased 26 percent from 1992 to reach $167.1 million in 1993. And Feld, the owner of about 51 percent of Today’s Man stock, supported several charities and community endeavors, such as God’s Love We Deliver, which provided meals to homebound individuals with AIDS. To honor some who had died from AIDS, Today’s Man sponsored an exhibition of the Names Project AIDS Memorial Quilt at the Guggenheim Museum SoHo and also hung quilt panels in the display windows of the Chelsea and Upper West Side stores. In 1992 B’Nai B’rith honored Feld with its Distinguished Achievement Award. Feld also backed the Temple University Entrepreneurial Institute, Harvard Business School, Israel’s Ben Gurion University, and the Holocaust Memorial Museum in Washington, D.C.
Although discount men’s clothing stores in the early 1990s did quite well as they followed the footsteps of successful women’s discount retailers a decade or so earlier, they did so in spite of an overall negative trend in men’s apparel. Sales of men’s tailored clothing were dropping, partly as a result of the increase in more casual attire. About 4,000 men’s stores, 23 percent of the total, closed their doors between 1990 and 1994. At the same time, large department stores, including J.C. Penney and Sears, decreased their men’s suits for sale. By fall 1994 Sears sold no men’s suits, only separate pants and coats that could be sold without tailoring, and Penney’s also emphasized this approach.
By the mid-1990s, Today’s Man experienced some real setbacks. Management changes in July 1995 indicated troubled times. Howard Gross, the firm’s president and chief operating officer since March 1994, resigned after a poor Christmas 1994 season and a 48 percent decline in earnings for the fourth quarter of fiscal year 1994. Chairman and CEO David Feld decided not to replace Gross and took over his responsibilities. At the same time, the company went forward with its very aggressive plans for expansion on the East Coast and also into the Chicago area.
However, by November 1995 the company had reversed its position and began retreating. It announced that six new store openings scheduled for 1996 would be postponed. Following a dismal third quarter in which the firm lost $4.1 million, due to increased advertising costs and a late merchandise shipment for a company promotion, Today’s Man’s stock declined to $5.25 per share.
Not surprisingly, the company by November 1995 also faced major debt problems. Today’s Man reached “an understanding” with its bank lenders to relax some commitments under its $50 million line of revolving credit.
In early December 1995, Today’s Man hired Dillon, Read & Company as an outside source of advice and options, but their downturn continued. On December 18, the company’s stock dropped another 11 percent to just $3 a share, the lowest in 52 weeks on the NASDAQ market. At that point, Today’s Man operated 35 stores.
The new year saw more troubled times at Today’s Man. In early February 1996 the firm filed for Chapter 11 bankruptcy in the U.S. Bankruptcy Court in Delaware. At the end of the day the bankruptcy was filed, Today’s Man stock declined to just $1.875 per share. Later in the month, the company announced the elimination of 235 jobs by closing its seven Illinois stores and an outlet in Sunrise, Florida.
In March 1996 the company gained approval from the bankruptcy court to secure $20 million in credit from CIT Group/ Business Credit Inc. That allowed Today’s Man to continue purchasing new merchandise for its stores.
What accounted for the decline of Today’s Man in 1995 and 1996? Some analysts argued the firm simply tried to do too much too quickly. That assessment seemed reasonable, especially in light of David Feld’s goals or dreams in the early 1990s. “Our objective is to [be] the dominant men’s wear retailer in every market we serve,” said Feld in the September 2,1992 Daily News Record. ’ ’We intend to achieve this through our three-point strategy, which focuses on obtaining prime store locations, providing superior inventory and achieving the dominant advertising voice.”
At a 1993 Paine Webber retailing conference, Feld said the chain planned by 1997 to dominate the men’s tailored retail market in Chicago. The reality was that they did open a few stores in Chicago, but none operated in 1997. Feld also predicted his chain could operate 100 stores by the end of the decade.
Some critics thought that this expansionist zeal was demonstrated when Today’s Man opened its flagship store on 5th Avenue in Manhattan. After throwing a huge party for 1,000 guests to celebrate that opening, Today’s Man’s leaders no doubt felt they were sitting on top of the world. One American Express analyst in the January 25, 1996 Wall Street Journal said, “Some people think that when a retailer builds a flagship in New York, that is the point in time when their ego is largest and their fear of failure is smallest. It’s also when they’re most likely to trip up.” Others in the same article pointed out how high rent was in the heart of Manhattan and how difficult it was to make a profit there.
Hiring too many top executives was one mistake, admitted Feld. And some analysts thought Today’s Man’s entry into the casual clothes field in fall 1993 was a little late and more difficult than the firm anticipated. In the December 19, 1995 issue of The Wall Street Journal, Bernard Sosnick of Oppenhei-mer & Company argued that Today’s Man began selling those items “without having a strong franchise in the casual clothing business. They expected shoppers would buy private-label [casual] merchandise, but it’s difficult to develop a franchise along those lines.”
Another analyst in the same article pointed out that Today’s Man’s price-cutting strategy was used by other firms to undercut it. Although Today’s Man by December 1995 had gained 10 percent of the tough New York City area market and hurt such competitors as NBO Stores and Syms Corporation, it faced constant challenges from competitors having going-out-of business sales and other price slashings.
In summary, a combination of soft demand for men’s business attire, management’s overambitious plans and mistakes, money problems, and tough competition led to Today’s Man decline.
In August 1997 the firm announced that the U.S. Bankruptcy Court had approved its disclosure statement detailing the company’s reorganization plan to pay its creditors cash and $15 million in equity. David Feld said, “Approval of our disclosure statement will remove one of the final hurdles to our emergence from Chapter 11. I am pleased that our dramatic turnaround enables us to provide full recovery to our creditors. At the same time, the financing of our plan leaves the Company with a healthy balance sheet for a moderate expansion plan and ongoing operations.”
Thus Today’s Man in 1997 was close to overcoming its Chapter 11 bankruptcy, a fundamental step to continuing as a major player in its core areas in and near New York City, Philadelphia, and Washington, D.C.
Auerbach, Jonathan, “Bankruptcy Filing Is Being Readied by Today’s Man,” Wall Street Journal, February 2, 1996, p. A5B.
Bird, Laura, “Today’s Man Stock Drops As President, Chief Operating Officer Gross Resigns,” Wall Street Journal, July 14, 1995, p. B5.
_____, “Some Factors Refuse to Guarantee Payment on Today’s Man Goods,” Wall Street Journal, December 19, 1995, p. B4.
Gellers, Stan E., “Today’s Man Bites into the Big Apple,” Daily NewsRecord, August 27, 1993, p. 4.
Lettich, Jill, “Men’s Off-pricer Expands to New Market,” Discount Store News, September 23, 1991, p. 5.
Macintosh, Jeane, “Two Category Killers Cash in on Clothing; in the East It’s Today’s Man,” Daily News Record, October 29, 1992, p. 4.
_____, “New Issues in Retail, Apparel Heat Up; Hilfiger, Today’s Man, Men’s Wearhouse Are Among Hottest Stocks,” Daily News Record, December 9, 1992, p. 8.
Marsh, Lisa, “Today’s Man: Expanding for Tomorrow,” Daily News Record, March 26, 1991, p. 3.
Palmieri, Jean E., “Today’s Man Projects Sales to Hit $1 Billion,” Daily News Record, January 18, 1990, p. 2.
Patterson, Gregory A., “Nineties Men Want Cheap Suits, And These Three Chains Oblige,” Wall Street Journal, October 19, 1994, pp. Bl, BIO.
Pulliam, Susan, “Retailers Find New York Opening’s Flash Is Often Followed by Stock-Price Crash,” Wall Street Journal, January 25, 1996, pp. Cl, C2.
Rothstein, Mervyn, “A Banking Corner Tries on a New Wardrobe,” New York Times, November 13, 1994, section 9, p. R15.
Ryan, Thomas J. “Today’s Man to Dominate Chicago Market by ’97: Feld; CEO Tells Paine Webber Gathering,” Daily News Record, September 14, 1993, p. 10.
Shaw, Dan, “Doing Good, and Doing Well, Too,” New York Times, December 11, 1994, section 1, p. 67.
“Today’s Man Inc. Files for Bankruptcy Protection,” Wall Street Journal, February 5, 1996, p. B8.
“Today’s Man Sets Public Offering,” Daily News Record, March 31, 1992, p. 10.
—David M. Walden