Jim’s Formal Wear After Hours Deal

Jeffrey Morton by After Hours Formalwear
A very gracious Gary Davis was happy to comment on the After Hours wholesale division closing and what Jim’s is looking to do with the information purchased:

No dark mysteries from us:

Yes, we did purchase the dealer LIST for AH wholesale and their recommendation as a future partner. We did not buy any stores, service centers or merchandise. This only gives us the first "opportunity" to work with all of these dealers. Contrary to some of the rumors, JFW will not be transitioning over all of the Jeffrey Morton/Hub accounts. We simply do not have the capacity to properly service our current Customers AND retain 100% of the AH/MWH accounts. With the "ending wholesale" announcement, we did ship JFW catalogs to selected JM/Hub customers. We also hope to build stronger partnerships with our currently shared dealers. Unfortunately, there will be more than 1,500 JM/Hub dealers that we cannot service and still maintain our service standards.

With all of the potential business out there for everyone, we hope we can lead the Industry into discontinuing many of the run away discounts that AH was giving many dealers. In fact, it is our intention to discontinue the "every 7th free" mindset in the California market and take it closer to a more standard "Groom Free" promotion. While not fans of any permanent discount programs, we feel our dealers need a free groom program to compete against the MWH/AH stores going forward. We hope to be able to provide everyone in the Industry a chance to make more money by not having to match or compete against the significant discounting. This will be good for both the Wholesalers as well as Specialists who compete against wholesale dealers. Fairer prices for all!

We are currently investing millions of dollars to gear up inventories and capacities in our Centers to better prepare for the potential business. We are doing everything we can to satisfy our dealers and their customers next Prom and through the busy Summer/Fall Wedding Season. Trying to anticipate the potential demand is both scary and exciting! To help meet the demand, we will be opening a 10th Service Center in the Mid-Atlantic area before Prom Season, another HUGE investment and monumental task. There will be plenty of business next April through October for all of us to struggle through with this major player leaving the field. If we have to risk more by investing in more merchandise and equipment to meet this demand, why should any of us give it away to dealers just because they are used to getting unrealistic (and unprofitable!) discounts from AH. This is a window of opportunity to improve all of our businesses.

I hope this answers the questions and rumors that are out there. I remain available to anyone who would like to talk to me regarding their thoughts and additional questions.

Here's to a GREAT 2008 for all of us!

Gary Davis
CEO/Chairman
Jim's Formal Wear Co.
618-224-9211