Eminence Capital Men’s Wearhouse Bullish Presentation

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Eminence Capital Men’s Wearhouse Bullish Presentation

Eminence Capital Presentation on MW, below is an excerpt followed by the full PDF.

Eminence Capital, LLC is a global asset management firm with over $4.5 billion in assets under management, primarily invested in publicly traded equity securities. Eminence is currently the single largest shareholder in The Men’s Wearhouse, Inc. (NYSE:MW) owning approximately 4.7 million shares (9.8% of shares outstanding) with a current market value of $215 million. We also own approximately 1.4 million shares of Jos. A. Bank Clothiers Inc (NASDAQ:JOSB), representing an investment with a current market value of $70 million.

21st Century Investing with The Investment Integration Project’s William Burckart

Yarra Square Investing Greenhaven Road CapitalValueWalk's Raul Panganiban interviews William Burckart, The Investment Integration Project’s President and COO, and discuss his recent book that he co-authored, “21st Century Investing: Redirecting Financial Strategies to Drive System Change”. Q1 2021 hedge fund letters, conferences and more The following is a computer generated transcript and may contain some errors.


Why Eminence Capital like Men’s Wearhouse?

  • Scale, as the largest men’s specialty retailer in North America
  • Attractive niche, in that The Men’s Wearhouse, Inc. (NYSE:MW) services need-based purchases with inventory that is subject to reduced fashion cycles
  • Attractive core businesses, with stable merchandise margins that are over 60% in core apparel and tuxedo – among the highest and most consistent in retail apparel
  • Earnings upside that we believe will follow from the recent decision to shed non-core businesses and re-focus on the higher-margin suit and tuxedo categories
  • Growth driven by the introduction of premium-priced Joseph Abboud, an exclusive label strategy which we expect will drive enhanced sales, margins and ROIC
  • Underlevered balance sheet and positive free cash flow provide the opportunity for further return of capital to shareholders

Eminence Capital believe that the Men’s Wearhouse board is wrong

  • Eminence did not initially invest in The Men’s Wearhouse, Inc. (NYSE:MW) to agitate for change
  • However, when Jos. A. Bank Clothiers Inc (NASDAQ:JOSB) surfaced with an offer, we recognized that this combination offers a COMPELLING OPPORTUNITY for Men’s Wearhouse shareholders
  • In our view, the VALUE CREATION from this combination is MASSIVE with a potential for $2 billion of value to be created from a combination of cost savings, revenue synergies and multiple expansion
  • The magnitude of potential value creation from this combination indicates to us that Jos. A. Bank Clothiers Inc (NASDAQ:JOSB) should be prepared to offer a SIGNIFICANT PREMIUM for The Men’s Wearhouse, Inc. (NYSE:MW) that is far greater than its standalone prospects

See full article PDF here Eminence Capital Men’s Wearhouse

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