cheap suits for tough times
as i scarfed down my lunchtime tacos, the dow fell to its lowest point since 1997. ahh, 1997. back then i followed the market differently than today -- paying more attention to my investments than to my department's endowments. as the tech bubble expanded in the clinton years, investors made the basic attribution error of assuming we were A#1 world-champeen stock-pickers just because we were making money. in fact, peter lynch sold a lot of books in the early 1990s telling us to exploit our "local knowledge" and invest in what we know:
"Your investor's edge is not something you get from Wall Street experts. It's something you already have. You can outperform the experts if you use your edge by investing in companies or industries you already understand."
"If you stay half-alert, you can pick the spectacular performers right from your place of business or out of the neighborhood shopping mall, and long before Wall Street discovers them."empowering stuff, right? and easy to believe when all but the leakiest boats are rising. i never had much to invest, but loved that advice. here's an example: back when i was buying computers for a small non-profit, i'd pay a premium for ibm because the clones were flimsy and sold out of warehouses. i'd go to jimmy's comp-u-shack for my home pc, but buy a dozen expensive big blue machines for the office. then i saw the compaq line -- sturdy and powerful, with fine documentation, warranties, and distribution -- all at a bargain price. buying compaq was a small risk, i suppose, but i got much love from colleagues for saving money that could be better spent on staff or clients.
if buying compaq over ibm was a no-brainer for me, i knew my counterparts in other organizations would make the same choice in coming months. so, i scraped together enough for a few shares and made a little profit. i've had similar luck buying into good experiences with retailers like home depot (but lousy luck buying into restaurants like famous dave's). as a criminologist, i might've made money by spotting trends in, say, private prisons or tasers, but i really don't want to invest in private prisons or tasers. still, i appreciate mr. lynch's populocapitalist vision of spotting trends in day-to-day life.
it seems downright foolish to buy retail stocks today, but my gut is telling me to buy men's wearhouse at ten bucks per share. i stopped by MW in january, searching for an interim suit to tide me over until aforementioned gut returns to its right and proper 33 inches. my favorite local shop is heimie's haberdashery, which has served me well (but not cheaply) for at least 25 years.* here are five reasons, apart from the awesome commercials, that i'd take a crazy gamble on men's wearhouse:
1. look around: suits are back.
2. recession and austerity. even stylish and more affluent men are uncomfortable spending $1000 on a suit or -- just as importantly -- looking like they spent $1000 on a suit in these austere times. men's wearhouse offers jackets around $100 and respectable suits in the $250-$350 range.
3. service orientation. the service and tailoring can't compare with heimie's, but the staff was smart, friendly, and attentive. they treat inexperienced purchasers, such as those buying a first suit for an interview or a wedding, with particular care. since dudes were walking in nervous and walking out smiling, i suspect they'll be back for more. men's wearhouse can also turn around alterations in hours or days, rather than the two weeks it would take at nordstrom or similar shops.
4. everyone from gardy to grads shops there. twins manager ron gardenhire was at the roseville shop when i visited. although he earns good money, mr. gardenhire is otherwise a fairly typical men's wearhouse customer. he came in with his wife on monday to make a rare suit purchase for a thursday banquet, joking that he wanted a three-piece "in camo." my salesperson assures me that the young and hyper-affluent batting champ joe mauer shops there as well. heck, even a brilliant grad student who despises the idea of suits, clothes, and shopping reported a positive experience at MW. these folks clearly know their customers and treat them well.
5. accessorizing. by the time i'd left the dressing room, a "color specialist" (or something like that) had selected four shirt and tie combinations in my size -- some with pocket squares, links, and other accessories. these too were inexpensive, but presented attractively in a low-pressure setting. i didn't buy many of her picks, but it was easy to say yes to a few -- she really nailed the colors and patterns, adding a few higher-profit items to the ticket.
6. mark-downs and follow-ups. my purchase made me eligible to get the next purchase at a sizeable discount. i suspect i'll be getting more invitations and opportunities to buy.
i still haven't put any money into MW stock, since the numbers don't look great and the company's holdings include stores i know nothing about -- after hours tux rental, k & g, and moore's. still, i noticed they recently made fortune's top 100 companies to work for list. if i don't hear any more bad news, i'll likely dip my toe in the water with a small investment.
* buying my first suit at heimie's -- then located in a converted der wienerschnitzel restaurant on robert street -- was like a ritual entry into manhood. i still recall the pinups on the changing room wall, the round little dude with the measuring tape and cigar, and the raymond chandler-style banter. no wonder i'm still buying suits.