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Department store retailer ends tux rental partnership


It seems the party is over between Macy’s and Tailored Brands’ Men’s Wearhouse.

The department store retailer is winding down operations related to the agreement it had to establish Men’s Wearhouse tuxedo rental shops in 300 Macy’s stores. While both companies pursued the partnership as a way to expand sales in the tuxedo rental market, volume was lower than expected. (In March, Tailored Brands said it was in discussions to restructure its agreement with Macy’s.)

“Macy’s is always looking for new partnerships that benefit both parties, as well as our customers, and we are grateful to have had the opportunity to collaborate with Tailored Brands. While the partnership did not produce the level of sales we expected, we will continue to benefit from the insights we gathered,” said Tim Baxter, chief merchandising officer at Macy’s.

Macy’s will continue to take new reservations until June 1, and plans to cease operations by July 14. Customers with outstanding rentals after this period will be contacted, and offered the option of transferring their reservation to a nearby Men’s Wearhouse or Jos. A. Bank store, according to Macy’s.

Based on the decision, Tailored Brands expects to narrow its operating loss for 2017. According to its updated outlook for fiscal 2017, the company plans to report one-time charges of approximately $17 million, of which $2.5 million are non-cash costs. Excluding these charges, Tailored Brands expects to report a fiscal 2017 operating loss on the Macy's tuxedo rental business in the range of $7 million to $8 million, compared with its previous outlook of an operating loss of $19 million to $20 million.
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