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Market Update : 
The Men’s Wearhouse Q1 Earnings Call Transcript
Author: 123jump.com Staff
123jump.com
Last Update: 9:08 PM ET June 21 2009


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Yes, hi. I was wondering if you can elaborate a little bit about the marketing spend since it has been so successful to support Men’s Wearhouse and K&G with some TV campaign. How should we think about advertising budget for the second quarter and for 2009 on an annual basis?

George A. Zimmer

Well, as we said at the beginning of the year, even though we were going to be under enormous pressure at the bottom line EPS level that since we dominated our category and had virtually no debt we were not going to reduce our marketing spend and if opportunities presented themselves because of lower demand we would consider even spending a little bit more and I would suggest that that’s more likely what I said at the end that because of increased opportunities our marketing spend in absolute dollars is likely going to be larger than LY.

Operator

Thank you. Our next question is a follow up from David Mann. Please go ahead.

David Mann – Johnson Rice & Company L.L.C.

Yes, thank you. In terms of the BOGO promotion, can you just talk about the performance by category? How did suits do relative to other categories within the Men’s Wearhouse stores?

George A. Zimmer

It’s overwhelmingly about suits more so than normally.

David Mann – Johnson Rice & Company L.L.C.

Okay. And then in terms of, Neill, you talked about occupancy expense as being flattish in the second quarter. Can you talk a little bit about how far along you are in terms of the rent renegotiations? And also give us a sense, it would seem like you would be able to get some year-over-year declines in the back half. Any comment on visibility in terms of back half occupancy expense.

Neill P. Davis

We still think it would be down. We always keep our real estate team busy and the top priority for them when they integrate that with their ongoing activity and that activity has reflected in the projections that we have identified and I think the smartest decrease in the years are still playing and keep in mind too that’s an aggregate dollar number year-over-year and that we had opened up a fair amount of stores last year so we are bringing on a fair amount of incremental rent on a full-year basis. So there’s really nothing new David to speak up. The process has been in place. The results are being achieved and that’s where we are. So nothing major changed in that regard.

George A. Zimmer

One other thing if I could add. We have so many locations. We have an advantage here because we negotiate 200 a year and in terms of our Tux rental locations we now can go to landlords and with confidence say you are going to have to lower your rent or we are going to close this location, and so, we think there is still a lot of room throughout the organization to avail ourselves of rent reductions.

Operator

Thank you. We have a follow up from the line of Janet Kloppenburg. Please go ahead.

Janet Kloppenburg – JJK Research

Hi. George, I was a little confused. I guess I missed something about raising prices or maybe there has been a mix change so some suits are higher priced while others are on a summer sale or being BOGOed. So I would love a clarification on that and also, if you could comment a little about sourcing. We are hearing from most of our companies that product costs are declining which should help IMUs going forward. If you could comment on how that may be affecting your business.

George A. Zimmer


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