UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10‑K

Commission file number 1‑16097

TAILORED BRANDS, INC.

(Exact Name of Registrant as Specified in its Charter)

(281) 776‑7000

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Securities registered pursuant to Section 12(g) of the Act:

None

Indicate by check mark if the registrant is a well‑known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☒.  No ☐.

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ .  No ☒.

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒.  No ☐.

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S‑T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒.  No ☐.

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S‑K is not contained herein, and will not be contained, to the best of the registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10‑K or any amendment to this Form 10‑K. ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non‑accelerated filer, or a smaller reporting company or emerging growth company. See the definitions of “large accelerated filer”,filer,” “accelerated filer”filer,” “smaller reporting company,” and “smaller reporting“emerging growth company” in Rule 12b‑2 of the Exchange Act. (Check one):

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b‑2 of the Exchange Act). Yes ☐.  No ☒.

The aggregate market value of the voting stock held by non‑affiliates of the registrant, based on the closing price of shares of common stock on the New York Stock Exchange on July 30, 2016,29, 2017, was approximately $707.2$607.4 million.

The number of shares of common stock of the registrant outstanding on March 17, 201723, 2018 was 48,783,700.49,292,856.

DOCUMENTS INCORPORATED BY REFERENCE

Effective January 31, 2016, Tailored Brands, Inc., a Texas corporation (“Tailored Brands” or the “Company”), became the successor reporting company to The Men’s Wearhouse, Inc. (“Men’s Wearhouse”) pursuant to a holding company reorganization (the “Reorganization”). 

Unless the context otherwise requires, references in this report to “Company”, “we”,“Company,” “we,” “us” and “our” for periods prior to January 31, 2016, refer to Men’s Wearhouse which was the parent company and the registrant prior to the Reorganization, and, for periods after the Reorganization, to Tailored Brands, which is the current parent holding company, in each case including its consolidated subsidiaries. References herein to years are to the Company’s 52‑week or 53‑week fiscal year, which ends on the Saturday nearest January 31 in the following calendar year. The periods presented in theseour financial statements are the fiscal years ended February 3, 2018 (“fiscal 2017”), January 28, 2017 (“fiscal 2016”), and January 30, 2016 (“fiscal 2015”), and January 31, 2015 (“fiscal 2014”). Each of these periods had 52 weeksexcept for fiscal 2017, which consisted of 53 weeks.

Forward‑Looking and Cautionary Statements

Certain statements made in this Annual Report on Form 10‑K andor in other public filingsmaterials we have filed or will file with the Securities and press releasesExchange Commission (“SEC”) (as well as information included in oral statements or other written statements made or to be made by the Companyus) contains or may contain “forward‑looking” informationforward‑looking statements (as defined in the Private Securities Litigation Reform Act of 1995) that involves risk, including, but not limited to, statements regarding our future financial performance and uncertainty.financial condition.  Words such as “expects,” “anticipates,” “envisions,” “targets,” “goals,” “projects,” “intends,” “plans,” “believes,” “seeks,” “estimates,” variations of such words and similar expressions are intended to identify such forward-looking statements.  Forward‑looking statements reflect our current views regarding certain events that could affect our financial condition or results of operations and may include, but are not limited to, references to future sales, comparable sales, margins, costs, earnings, number and costs of store openings, closings, remodels, refreshes, relocations and expansions, capital expenditures, potential acquisitions or divestitures, synergies from acquisitions, business strategies, demand for clothing or rental product, economic conditions, market trends in the retail and corporate apparel clothing businesses,business, currency fluctuations, inflation and various political, legal, regulatory, social, economic and business trends. Forward‑looking statements may be made by management orallyare based upon management’s current beliefs or in writing, including, but not limited to; in Management’s Discussionexpectations and Analysisare inherently subject to significant business, economic and competitive risks, uncertainties and contingencies and third party approvals, many of Financial Condition and Results of Operations included in this Annual Report on Form 10‑K and other sections ofwhich are beyond our filings with the Securities and Exchange Commission under the Securities Exchange Act of 1934, as amended and the Securities Act of 1933, as amended.control.

Forward‑Any forward‑looking statements that we make herein and in future reports are not guarantees of future performance, and a variety of factors could cause actual results tomay differ materially from the anticipated or expected results expressedthose in or suggested by thesesuch forward‑looking statements.statements as a result of various factors. Factors that might cause or contribute to such differences include, but are not limited to: actions or inactions by governmental entities; domestic and international macro‑economic conditions; inflation or deflation; the loss of, or changes in, key personnel; success, or lack thereof, in formulating or executing our internal strategicstrategies and operating plans including new store and new market expansion plans; cost reduction initiatives; store rationalization plans; profit improvement plans;initiatives and revenue enhancement strategies; the impact of tuxedo shops within Macy’s stores; changes in demand for clothing or rental product; market trends in the retail business; customer confidence and spending patterns; changes in traffic trends in our stores; customer acceptance of our merchandise strategies;strategies, including custom clothing; performance issues with key suppliers; disruptions in our supply chain; severe weather; foreign currency fluctuations; government export and import policies; advertising or marketing activities of competitors; the impact of cybersecurity threats or data breaches and legal proceedings.

Forward‑looking statements are based upon management’s current beliefs or expectations and are inherently subject to significant business, economic and competitive uncertainties and contingencies and third party approvals, many of which are beyond our control. Please see “Risk Factors” contained in Part IA of this Annual Report on Form 10‑K for a more complete discussion of these and other factors that might affect our performance and financial results. Forward‑looking statements are intended to convey the Company’s expectations about the future, and speak only as of the date they are made.  We undertake no obligation to publicly update or revise any forward‑looking statements that may be made from time to time, whether as a result of new information, future developments or otherwise, unlessexcept as required to do so by applicable law.

All However, any further disclosures made on related subjects in our subsequent reports on Forms 10-K, 10-Q and 8-K should be consulted.  This discussion is provided as permitted by the Private Securities Litigation Reform Act of 1995, and all written or oral forward‑lookingforward-looking statements that are made by or attributable to us are expressly qualified in their entirety by the cautionary statements contained or referenced in this cautionary notice.section.

PART I

ITEM 1.  BUSINESS

General

We are athe leading authority on helpingspecialty retailer of men’s tailored clothing and the largest men’s formalwear provider in the United States (“U.S.”) and Canada and help men dress for work and special occasions and everyday life.occasions. We serve our customers through an expansive omni-channel network that includes over 1,6001,400 locations in the U.S. and Canada as well as our branded e-commerce websites.websites at www.menswearhouse.com, www.josbank.com, and www.josephabboud.com.  

Our Brands and Products

Our U.S. retail stores are operated under the Men’s Wearhouse, Men’s Wearhouse and Tux, Jos. A. Bank, Joseph Abboud and K&G brand names and are operated in 50 states, the District of Columbia and Puerto Rico. Our Canadian stores are operated under the Moores brand name and operate in 10 Canadian provinces. As of January 28, 2017,February 3, 2018, the Company operated 1,667 stores including tuxedo shops within Macy’s1,477 stores throughout the U.S., Puerto Rico and Canada.  In addition, at January 28, 2017,February 3, 2018, we operated 3938 retail dry cleaning, laundry and heirlooming facilities through MW Cleaners in Texas. These operations comprise our retail segment.

On June 18, 2014, the Company acquired Jos. A. Bank Clothiers, Inc. (“Jos. A. Bank”),February 28, 2018, we entered into a men’s specialty apparel retailerdefinitive agreement to divest our MW Cleaners business for approximately $1.8 billion. For additional information, see Note 2, “Acquisition”,$18.0 million, subject to our consolidated financial statements included in this Annual Reportcertain adjustments, and the transaction closed on Form 10‑K.March 3, 2018. 

We also own and operate a factory located in New Bedford, Massachusetts that manufactures quality U.S. made tailored clothing primarily under the Joseph Abboud and Reserve labels includingconsisting of designer suits (including custom suits), tuxedos, sport coats and slacks that we sell in our Men’s Wearhouse or Jos. A. Bank stores as well as our Joseph Abboud flagship store and via our e-commerce websites.  We also sell Joseph Abboud branded tailored clothing in our Moores stores, which is produced by a third party in Canada.

Additionally, we operate an international corporate apparel business.business with operations in both the United Kingdom (“UK”) and the U.S. Our UK‑basedUK-based business is the largest provider of corporate apparel in the United Kingdom (“UK”)UK under the Dimensions, Alexandra and Yaffy brands.  In the U.S., our corporate apparel business operates under the Twin Hill brand name.  Our corporate apparel business provides corporate clothing uniforms and workwear to workforces through multiple channels including managed corporate accounts, catalogs and the internet at www.dimensions.co.uk, www.alexandra.co.uk, and www.twinhill.com.

For information on store closings and openings, see “Item 6. Selected Financial Data” in this Annual Report on Form 10‑K.  Financial information concerning business segments and geographic area is contained in “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” and under Note 17 to our consolidated financial statements both included in this Annual Report on Form 10‑K.

Men’s Wearhouse/Wearhouse, Men’s Wearhouse and Tux and Moores

The Men’s Wearhouse and Moores target the male consumer (25(18 to 5565 years old) by providing a superior, level ofpersonalized customer service and offering a broad selection of exclusive and non‑exclusive merchandise brands at regular and sale prices that we believe are competitive with specialty retailers and traditional department stores. Our merchandise includes suits, suit separates, sport coats, slacks, formalwear, business casual, denim, sportswear, outerwear, dress shirts, shoes and accessories in classic, modern and slim fits and in a wide range of sizes including a selection of “Big and Tall” product.

Although basic styles are emphasized,comprise our core offerings, each season’s merchandise reflects current fit, fabric style and color trends. The inventory mix at our Men’s Wearhouse and Moores stores includes business, formalwear, business casual casual and formalcasual merchandise designed to meet the demand of our customers. The broad merchandise selection creates increased sales opportunities by permitting a customer to purchase substantially all of his wardrobe and accessory requirements including shoes, at our retail apparel stores. Based on our experience, we believe that the depth of selection of our merchandise offerings provides us with an advantage over our competitors.

During fiscal 2016, we also introduced a new collection of custom apparel consisting of suits, sport coats, slacks, shirts, tuxedos and vests, which are personalized to each customer’s specifications. BasedIn fiscal 2017, we experienced a significant increase in sales for custom clothing and believe it is a key growth initiative going forward.  See “Business Strategy” for additional information on our experience, we believe that the depthperformance of selection of our merchandise offerings provides us with an advantage over most of our competitors.custom clothing and other strategic initiatives for 2018 and beyond.

We also offer a full selection of special occasion offerings including tuxedo and suit rental product (collectively, “rental product”) at Men’s Wearhouse and Moores.. We believe our rental product broadens our customer base by drawing first‑time and younger customers into our stores and accordingly,stores.  During fiscal 2017, we experienced an increase in the consumer’s preference to purchase suits or formalwear for their special occasion needs instead of renting product.  We believe this trend is favorable for our offering includes an expanded merchandise assortment including dress and casual apparel targeted toward the younger customer.business as customers who purchase rather than rent tend to have a higher lifetime value for our business.  Regardless of whether our customer chooses to purchase or rent their special occasion clothing, we believe we are well-positioned to meet our customers’ special occasion needs.

At January 28, 2017,February 3, 2018, we operated 715718 Men’s Wearhouse retail apparel stores in 50 states, the District of Columbia and Puerto Rico. These stores are referred to as “Men’s Wearhouse stores” or “full line stores” that offer a full selection of retail merchandise and rental product. Men’s Wearhouse stores are primarily located in regional strip and specialty retail shopping centers or in freestanding buildings as we believe that men prefer direct and easy store access that enables our customers to park near the entrance of the store.

At January 28, 2017,February 3, 2018, we also operated another 5851 stores in 2423 states branded as Men’s Wearhouse and Tux. These stores are referred to as “rental stores” and offer a full selection of rental product and a limited selection of retail merchandise, and are located primarily in regional malls and lifestyle centers.  During fiscal 2016,Since 2013, we have closed 102197 Men’s Wearhouse and Tux stores, consistent with our strategy and as we continued to experience a consumer driven shift of rental revenues to our full line stores located in close proximity to the rental stores.

At January 28, 2017,February 3, 2018, we operated 126 Moores retail apparel stores in 10 Canadian provinces. Moores stores are primarily located in regional strip and specialty retail shopping centers.

Jos. A. Bank

Jos. A. Bank targets the male consumer (25 to 5565 years old) emphasizing superior service, high quality tailored business casual, casual, and formal clothing and accessories,attire, substantially all of which is sold under our exclusive Jos. A. Bank label.branded product including our Reserve and 1905 labels. Jos. A. Bank merchandise consists of suits, suit

We also offer a full selection of special occasion rental product at Jos. A. Bank. WeBank and believe our rental product offering provides the opportunity to broaden our customer base by drawing first‑time and younger customers into our stores.

The underlying rationale of our acquisition of  As is the case at Men’s Wearhouse, we believe Jos. A. Bank was our desireis well-positioned to increase our market share and capture operational efficiencies. As our understanding of the Jos. A. Bank business grew, we concluded that the historical promotional model at Jos. A. Bank had been delivering diminishing returns over time, and we realized that attaining satisfactory profitable revenue synergies was going to require eliminating the most excessive promotional offers.  As a result, during the latter half of fiscal 2015, we transitioned away from Jos. A. Bank’s historical promotional cadence by removing the most excessive offers (the Buy‑One‑Get‑Threemeet its customers’ special occasion needs, through retail clothing offerings, rental product or more Free events), and began seeking sustainable volume and margin growth.

While we expected some top‑line volatility as we changed the promotional model, we did not anticipate that the impact on top‑line sales from the traffic decline would occur to the degree it did. As a result of the steep decline in Jos. A. Bank’s sales and the significant decline in our market capitalization, we recorded $1.24 billion of goodwill and intangible asset impairment charges related to Jos. A. Bank in fiscal 2015. We remain confident that Jos. A. Bank offers a longer‑term opportunity to profitably grow market share in the menswear business and the Jos. A. Bank brand is a key part of our overall business strategy.custom offerings.

At January 28, 2017,February 3, 2018, we operated 506491 Jos. A. Bank retail apparel stores in 42 states and the District of Columbia. Jos. A. Bank stores are primarily located in fashion‑oriented, specialty retail centers. In addition, as of January 28, 2017,February 3, 2018, there are 14 franchise stores. During fiscal 2016, we closed 75 Jos. A. Bank full line and 47 Jos. A. Bank factory stores as part of our strategy to reengineer the Jos. A. Bank brand to a long-term, sustainable profit model. See “Business Strategy” for additional information on the performance of our Jos. A. Bank brand in 2016 and strategic initiatives for 2017 and beyond.

K&G

K&G stores offer a more value‑oriented superstore approach that we believe appeals to the more price‑sensitive customer in the apparel market. K&G offers first‑quality, current‑season apparel and accessories comparable in quality to that of traditional department stores, at prices we believe are typically up to 60% below the regular prices charged by such stores. K&G’s merchandising strategy emphasizes broad assortments across all major categories of both men’s and women’s career and casual apparel in a wide range of sizes including “Big and Tall” and “Women’s plus sizes” as well as tailored clothing, dress furnishings, sportswear, accessories, and shoes and children’s apparel. This merchandise selection, which includes exclusive and non‑exclusive merchandise brands, positions K&G to attract a wide range of customers in each of its markets.

At January 28, 2017,February 3, 2018, we operated 9190 K&G stores in 27 states, 86 of which offer women’s career apparel, sportswear, accessories, and shoes and children’s apparel. K&G stores are “destination” stores located primarily in second generation strip shopping centers that are easily accessible from major highways and thoroughfares.

In addition to custom clothing, we plan to continue to focus on growth through product innovation.  This includes performance fabrics such as our Kenneth Cole AWEAR-TECH offerings available at Men’s Wearhouse and Moores stores and our Jos. A. Bank TravelTech offering.  We also plan to continue to develop brands that will resonate with millennial customers, such as our 1905 line at Jos. A. Bank and Reinvigoratingsocially responsible brands including our “Awearness Kenneth Cole” at Men’s Wearhouse and Moores.  A contribution from all “Awearness Kenneth Cole” products sold goes toward helping veterans transition back into the workforce.

Increasing New Customer Acquisition and Enhancing Existing Customer Loyalty

During fiscal 2016,2017, we delivered positive comparable sales for our turnaround efforts atretail brands as a whole, with Men’s Wearhouse comparable sales improving throughout the year and turning positive in our fourth quarter, and Jos. A. Bank began to gain traction. Our 1905 collection, launched in late 2015, which features updated stylings and fits that target a younger customer has been well received and is a potential driver of future growth.  During fiscal 2016, we also launched a Jos. A. Bank collection called Reserve that features classic styles, luxury fabrics and updated fits targeting the premium customer, which has also been well received.  Additionally, we recently expanded the Reserve offering to include a custom tailored clothing and dress shirt offering with extensive fabric and styling options.  Along with the changes to our promotional and merchandising strategies, we have new selling techniques and a new store compensation program that align incentives with the improved selling behaviors and we are encouraged by the customer’s response to these initiatives. 

During fiscal 2016, the challenging retail environment resulted in soft traffic at all of our retail brands but our consolidated results were more significantly impacted by thereporting positive mid-single-digit comparable sales decrease atfor the year. 

We believe our Men’s Wearhouse brand.  Accelerating our turnaround efforts at Jos. A. Bank and reinvigorating the Men’s Wearhouse brands involve similar strategies. Our primary strategy for both brands is to engage more customers across all channels and to drive customer traffic.traffic helped us deliver improvement in comparable sales and we plan to build on these strategies.  For example, in 2018, we are shiftingplan to continue to shift our marketing strategies to emphasize the reasons why men should shop with us.  We will also be dedicatingexpect to continue to dedicate a greater share of our marketing mix to digital channels to target the millennial generation.expand our marketing reach.  In addition, we are focusedplan to strengthen our company reputation for social responsibility and grow brand affinity through our National Suit Drive, Canadian Suit Drive, merchandise donations and social cause campaigns that resonate with our target customers including those that support our veterans and certain cancer prevention efforts. 

We will continue to focus on improving our omni-channel strategies, as described inin-store experience to promote a more detail below, to provide our customers with more options to make theirengaged, personalized shopping experience easy.  that features our wardrobe consultants who help men create their personal style.  We intend to build customer loyalty by gaining a greater understanding of our customer’s needs, helping him meet those needs, and giving him confidence in the way he looks.  We have formalized a customer satisfaction measurement and feedback loop at the store level that elevates and standardizes the customer experience and focuses our stores on building long-term relationships with our customers.

We also planexpect to promote our loyalty programs to encourage new members and entice existing members to shop with us more frequently. Through our loyalty programs, we reward our loyal customers and are able to leverage the data our customers share with us to deliver a relevant and engaging experience that considers their lifestyles and preferences. Finally, we will continue to focus on our in-store experience to promote a more engaged, personalized shopping experience by leveraging our wardrobe consultants to help men create their personal style and become the authority on helping men dress for work, special occasions and everyday life. 

Enhancing Our Omni‑channel Capabilities

Our futureWe plan to drive growth plans continue to include the integration of digital technologies to provide aby providing an online sales experience that combines the advantages of our physical storestores with an information-rich online shopping experience throughvia our websitemobile-friendly websites and mobile applications. For example, at Men’s WearhouseWe are channel agnostic and Jos. A. Bank stores, if a customer wantswant our customers to purchase an item that is not available at the store, our clothing consultants can order it through our websites to fulfill the customer’s purchasing needs. In addition, during fiscal 2015, we launched our ship from store initiative, which further enhanced our customer’s online shopping experience. During fiscal 2016, we relaunched our Men’s Wearhouse and Jos. A. Bank websites to provide improved functionality, particularly for customers using mobile devices, and expanded our distribution center in Houston, Texas, facilitating our ability to achieve same-day-shipping for most Men’s Wearhouse and Jos. A. Bank orders.  Lastly, through our websites we arebe able to offer international shipping to over 100 countries. Our customers expect to shop whenever, wherever and however they likechoose across all channels in a seamless, connected way.  In 2017,As a result, we planare focused on improving our omni-channel strategies, as described in more detail below, to accelerateprovide our effortscustomers with more options to translatemake their shopping experience easy.

Our current omni-channel capabilities include ‘virtualized inventory’ that enables our high-service in-store experiencecustomers to order items through our websites when not available at the store. We can also ship online and to drive additional traffic topurchases from our stores to further enhance our omni-channel capabilities.customer’s online shopping experience and reduce delivery times. In 2016, we expanded our distribution center in Houston, Texas, to facilitate our ability to achieve delivery within two business days for most U.S. and Canada orders for Men’s Wearhouse and Jos. A. Bank.

In 2017, we made significant progress advancing our e-Commerce capabilities, including refining product recommendations and introducing a new guided shopping experience called “Look Finder”.  These enhancements have increased both conversion rates and average order values.

In 2018, we intend to continue to build on delivering personalized, high-tech, high-touch service online.  We planalso expect to continue to make investments in technologies, business processes and personnel intended to deepen our customer relationships, enhance the customer journey and increase our share of their closet.

Expanding Our Portfolio of Exclusive Offerings

We believe that expanding the number of exclusive offerings that we carry will increase our margins and profitability. We own and operate a factory that manufactures quality U.S. made tailored clothing under the Joseph Abboud and Reserve labels including designer suits, tuxedos, sport coats and slacks that we sell in our Men’s Wearhouse or Jos. A. Bank stores as well as our Joseph Abboud flagship store.  In addition, we have a consulting agreement with Joseph Abboud pursuant to which he was named our Chief Creative Director and engaged to create exclusive brands and products for our customers.

In fiscal 2015, we launched an exclusive designer men’s clothing line through a partnership with Kenneth Cole, under the “Awearness Kenneth Cole” label at Men’s Wearhouse. The collection includes ties, dress shirts, suits, sport coats, dress pants and watches.  A contribution

K&G stores are designed to allow customers to select and purchase apparel by themselves. For example, each merchandise category is clearly marked and organized by size, and suits are specifically tagged as a means of further assisting customers to easily select their styles and sizes. K&G employees are also available to assist customers with merchandise selection, including correct sizing.

Substantially all of our retail apparel stores offer tailoring services to facilitate timely alterations at a reasonable cost to customers. Tailored clothing purchased at a Men’s Wearhouse store will be pressed and re‑altered free of charge for the life of the garment (if the alterations were performed at a Men’s Wearhouse store). In addition, we utilize Company‑ownedour regional tailor shops, which receive merchandise from stores to perform tailoring services and return the merchandise to the selling store for customer pickup.

We offer our “Perfect Fit” loyalty program to our Men’s Wearhouse, Men’s Wearhouse and Tux and Moores customers. In October 2015, we launched the “Bank Account” loyalty program for Jos. A. Bank customers, which offers the same benefits and operates in the same manner as the “Perfect Fit” loyalty program. Under the loyalty programs, customers receive points for purchases. Points are generally equivalent to dollars spent on a one‑for‑one basis, excluding any sales tax dollars. Upon reaching 500 points, customers are issued a $50 rewards certificate that they may use to make purchases at our stores or online. All customers who register for our loyalty programs are eligible to participate and earn points for purchases. A majority of the sales transactions in fiscal 2016 at our Men’s Wearhouse, Men’s Wearhouse and Tux and Moores stores were to customers who participated in our loyalty program. We believe that the loyalty programs facilitate our ability to cultivate long‑term relationships with our customers.

Our advertising strategy primarily consists of television, email, online (including social media), mobile, direct mail, telemarketing and bridal shows. In fiscal 2017, we updated our advertising messaging, placing more emphasis on our product offerings and the customer experience, including our wardrobe consultants and tailoring services, and less emphasis on promotional messaging. We consideralso plan to continue to dedicate a greater share of our integrated efforts across thesemarketing mix to digital channels to betarget a broader customer segment.  We believe our updated advertising strategy is the most effective means of both attracting and reaching potential new customers as well as reinforcing the positive attributes of our various brands with our existing customer base. In addition, for Jos. A. Bank, we periodically distribute a catalog to communicate the Jos. A. Bank image, to provide customers with fashion guidance in coordinating outfits and to generate traffic in all of Jos. A. Bank’s sales channels.

Purchasing and Distribution

For the Men’s Wearhouse, Jos. A. Bank and Moores brands and, to a lesser extent, our K&G brand, our vertical direct sourcing model with third‑party suppliersmanufacturers covers design, product development, manufacturing, testing, quality control, and all necessary logistics required to get merchandise from the factory to the sales floor. We purchase merchandise and rental product from a broad supplier base of manufacturers and do not believe that the loss of any suppliermanufacturer would cause a significant negative impact to us. We have no material long‑term merchandise supplymanufacturing contracts and typically transact business on a purchase order‑by‑purchase order basis either directly with manufacturers and fabric mills or with trading companies. We have developed long‑term and reliable relationships with most of our direct manufacturers and fabric mills, which we believe provides stability, quality and price leverage. We also have a subsidiary in Hong Kong to facilitate our sourcing efforts for our products.Furthermore, we work with trading companies that support our relationships with suppliersmanufacturers for our direct sourceddirect-sourced merchandise and contract agent offices that provide administrative functions on our behalf. The agent offices provide all quality control inspections and ensure that our operating procedures manuals are adhered to by our suppliers.manufacturers. 

We are committed to social responsibility and environmental stewardship and have long supported the work of international agencies and organizations that seek to implement internationally recognized standards for labor practices.  We have developed and implemented a Supplier Code of Conduct that sets forth the compliance requirements that all suppliers must meet to do business with us. Our risk management department oversees our factory compliance efforts, and we also use the services of an outside audit company to conduct regular audits of factories we use.  We strive to work collaboratively with our clothing factories to positively influence them to embed compliance into their daily operations.  We also maintain standards and guidelines related to human trafficking and slavery and our managers with direct responsibility for supply chain management have attended training, particularly with respect to mitigating these risks within the supply chain.  For additional information regarding our commitment to improving factory working conditions, please review our 2017 Sustainability Report, which is available at ir.tailoredbrands.com.

In fiscal 2016,2017, our retail brands sourced approximately 69%66% of direct sourced merchandise from Asia (41%(39% from China) while 11% was sourced in Mexico, 10% in the U.S. (primarily from our U.S. factory), 6% was sourced in Mexico and 10%17% was sourced in other regions. Substantially all of our foreign purchases are negotiated and paid for in U.S. dollars. All direct sourcing suppliers are expected to adhere to our Supplier Code of Conduct and anti-corruption policy. To oversee compliance, we have a direct sourcing compliance department and we also use the services of an outside audit company to conduct regular supplier audits.

Our rental product is located in our Houston, Texas distribution center and in six additional distribution facilities located in the U.S. (five) and Canada (one). The six additional distribution facilities also receive limited quantities of retail product, primarily formalwear accessories, that is sold in our Men’s Wearhouse/Wearhouse, Men’s Wearhouse and Tux, Moores and Jos. A. Bank and Moores stores.

All retail merchandise and new rental product transported from suppliers to our distribution facilities is done so via common carrier or on a dedicated fleet of long‑haul vehicles. This dedicated fleet is also used to transport product from our distribution centers to the hub facilities and a fleet of leased or owned smaller vehicles is used to transport product from the hub facilities to our stores within a given geographic region.

Competition

We compete against a broad spectrum of other men’s clothing stores. Our primary competitors include traditional department stores, other specialty men’s clothing stores, online retailers, online tuxedoformalwear rental providers, off‑price retailers, manufacturer‑owned and independently‑owned outlet stores, independently-owned formalwear rental stores, and all of their e‑commerce channels, and independently owned tuxedo rental stores.respective e-commerce channels. We believe that the principal competitive factors in the menswearmen’s apparel market are merchandise assortment, quality, value, garment fit, merchandise presentation, store location and customer service, including on‑site tailoring.

We believe that our merchandise offerings, including exclusive brands and custom clothing, and emphasis on customer service distinguish us from other retailers. Certain of our competitors (principally department stores) may be larger and may have substantially greater financial, marketing and other resources than we have and therefore may have certain competitive advantages.

Corporate Apparel

Overview

Our international corporate apparel business operatingoperates under the Dimensions, Alexandra and Yaffy brands primarily in the UK and Europe, and Twin Hill in the U.S., whichand provides corporate clothing uniforms and workwear to workforces. We offer our corporate apparel clothing products through multiple channels including managed corporate accounts, catalogs and the internet at www.dimensions.co.uk,  www.alexandra.co.uk, and www.twinhill.com. We offer a wide variety of customer branded apparel such as shirts, blouses, trousers, skirts and suits as well as a wide range of other products from aprons to safety vests to high visibility police outerwear. With respect to our managed contracts, we generally provide complete management of our customers’ corporate clothing programs from design, fabric buying, manufacturing, product roll‑outs and ongoing stock replacement and replenishment.programs.

Customer Service and Marketing

Our customer base includes companies and organizations in the airline, retail grocery, retail, banking, quick service restaurants, car rental, distribution, travel and leisure, postal, security, healthcare and public sectors. Sector characteristics and economics tend to impact the corporate wear requirements of our individual customers. For example, retail customers typically have high staff turnover levels resulting in large replenishment volumes and significant seasonal demand, while banking customers generally have lower turnover and replenishment requirements but refresh or rebrand uniforms more frequently. The UK public service sector has historically consisted of fragmented regional authorities although there seems to be a move toward more consolidated sourcing units.

Our managed contract customers are generally organizations with larger numbers of uniform-wearing employees or those that use uniforms as a form of brand identity. We have long established relationships with many of the UK’s top employers and we currently maintain approximately 30 managed accounts with an average account size greater than 15,000 wearers. In addition, during 2016, we completed the rollout of a large uniform program for approximately 70,000 wearers. 

Under our managed contracts, we take responsibility for dressing our customers’ employees and are the exclusive supplier of corporate wear to many of our customers. Because of the nature of the managed contract model, we ensure that we are fully involved in all of our customers’ uniform requirements, from daily replenishment requirements to longer term rebranding plans and wider corporate wear strategy. As a result,

Our catalogs are distributed electronically, via mail and by sales representatives to current and potential customers. The catalogs offer a full range of our products and offer further branding or embellishment of most products ordered. Catalog orders can be placed via phone, mail, fax or direct contact with our sales representatives and, in the U.S., via client‑specific websites. Our UK e‑commerce platforms also allow online ordering via our websites and provide 24‑hour functionality, with a full list of our products and their details. Our typical catalog customers are small to medium sized organizations with a relatively smaller number of employees or organizations where brand differentiation is not imperative.  In addition, we regularly develop dedicated websites for our corporate clients for use by their employees in ordering their company specific corporate wear.

During fiscal 2016, as a result of the rollout of a large uniform program, we had one customer which accounted for approximately 20% of our total corporate apparel net sales.  However, we do not believe that the loss of any customer would significantly impact us.

Merchandising

In our corporate apparel business, we work with our customers to create custom apparel programs designed to support and enhance their respective brands. Our comprehensive apparel collections, including basic apparel categories such as shirts, blouses, trousers, skirts and suits as well as a wide range of other products from aprons to safety vests to high visibility police outerwear, feature designs with sizes and fits that meet the performance needs of our customers’ employees and utilize the latest technology in long‑wearing fabrications. Career wear, casual wear and workwear make up an increasingly significant portion of the product mix as service industry customers continue to grow.

Under our managed contracts, our customers receive a full range of services including design, fabric buying and manufacturing, measuring and sizing, employee database management and replenishment forecasting, supply chain management and distribution and logistics of finished products. Customers work with our in‑house design and technical teams to design and develop uniforms or other corporate wear that creates strong brand identity. We utilize our management information and garment tracking system to highlight trends, identify issues and provide benchmark data for the customer at all levels from individual wearer to enterprise‑wide. This system also allows us to identify potential cost savings and develop solutions on behalf of our customers and to respond quickly to trends or other changing needs.

With respect to our UK catalog and internet operations, customers can design an off‑the‑rack program that provides custom alterations and embroidery on any of our standard, ready‑to‑wear clothing. We work with such customers to create a distinctive, branded program that may include the addition of a company logo or other custom trim.

Purchasing and Distribution

MostAll corporate apparel garment production is outsourced to third‑party manufacturers, andincluding fabric mills, through our direct sourcing programs. We have developed long‑term relationships with most of our direct manufacturers and fabric mills, which we believe provides stability, quality and reliability. We do not have any material long‑term contracts with our suppliersmanufacturers and we do not believe that the loss of any suppliermanufacturer would significantly impact us. We also work with trading companiescontract agent offices that support our relationships with our direct source suppliers and with contract agent offices that provide administrative functions on our behalf.  In addition, the agent offices assist with quality control inspections and ensure that our manufacturers adhere to our operating procedures manuals are adheredmanuals.  Also, we operate a dedicated liaison office in Bangladesh to by our suppliers.perform these functions.

During 2016,2017, approximately 65% of our corporate wear product purchases was sourced in Asia (primarily China, Pakistan, Bangladesh, Pakistan, Indonesia, Sri Lanka and Vietnam)Indonesia) while approximately 35% was sourced from Europe and other regions. Our foreign purchases from Asia are negotiated and paid for in U.S. dollars, while our purchases from Europe and other regions are negotiated and paid for in British pounds or Euros.

As a member of the Ethical Trading Initiative (“ETI”) since 2007, our UK-based supply chain operations have adopted the internationally recognized ETI Base Code of labor practice as part of their efforts to improve working conditions and uphold human rights in an environmentally friendly workplace for the benefit of manufacturers.  In addition our UK operations have written and published on their website their Modern Slavery Statement in accordance with the UK’s Modern Slavery Act of 2015. 

To oversee compliance with our Supplier Code of Conduct, we use internal resources as well as third party companies to audit the factories producing our garments. We strive to work collaboratively with our suppliersclothing factories to positively influence them to embed compliance into their daily operations.

Seasonality

Our sales and net earnings are subject to seasonal fluctuations.fluctuations and may vary by brand. Our rental product revenues are heavily concentrated in the second and third quarters (prom and wedding season) while the fourth quarter is considered the seasonal low point. In addition, Jos. A. Bank has historically experienced increased customer traffic during the holiday season and its increased marketing efforts during the holiday season have historically resulted in sales and net earnings generated in the fourth quarter, which are significantly larger as compared to the other three quarters. This trend did not occur in the fourth quarter of 2015 as a result of our decision to change the brand’s promotional cadence.  However, the trend resumed in 2016 and we expect the trend to continue in the future.  With respect to corporate apparel sales and operating results, seasonal fluctuations are not significant but the acquisition of new customers or existing customer decisions to rebrand or revise their corporate wear programs can cause significant variations in period results. Because of these fluctuations, results for any quarter are not necessarily indicative of the results that may be achieved for the full year.

Trademarks and Service Marks

We are the owner in the U.S. and selected other countries of the numerous trademarks and service marks we use including, without limitation, MEN’S WEARHOUSE, MW MEN’S WEARHOUSE (and design), JOS. A. BANK, and JOSEPH ABBOUD and of U.S. and foreign registrations for such marks.  Our rights in the MEN’S WEARHOUSE, JOS. A. BANK, JOSEPH ABBOUD, and other marks and their respective variations are a significant part of our business, as the marks have become well known through our use of the marks in connection with our retail and formalwear rental services and products (both in store and online) and our advertising campaigns.  We are also the owner of various other trademarks and service marks, and corresponding trademark registrations in the U.S., Canada and abroad under which our stores and corporate apparel business operate or which are used to label the products we sell or rent. We intend to maintain and protect our marks and the related registrations.

We also license the JOSEPH ABBOUD brand to certain third parties for limited products in the U.S. and Canada, and for a broader range of products in select countries abroad.

We are the licensee for certain designer labels on various products such as men’s suits, men’s formalwear or men’s shirts. We generally pay a royalty for the use of the label, based on cost for the relevant product or a percentage of related sales. We monitor the performance of these licensed labels compared to their cost and may elect to selectively terminate any license, as provided in the particular agreement. 

Employees

At January 28, 2017,February 3, 2018, we had approximately 22,50021,000 employees, consisting of approximately 20,10018,600 in the U.S. and 2,400 in foreign countries, of which approximately 16,40015,400 were full‑time employees. Seasonality affects the number of part‑time employees as well as the number of hours worked by full‑time and part‑time personnel.

At January 28, 2017,February 3, 2018, approximately 700660 of our employees at the factory located in New Bedford, Massachusetts are members of Unite Here, a New England based labor union. The current union contract expires in April 2019.  At February 3, 2018, approximately 25 of our employees at our distribution center located in Quebec, Canada are members of Service Employees Union, Local 800. The current union contract expires in April 2018.

Also, approximately 250230 employees working in the Jos. A. Bank Hampstead, Maryland tailoring overflow shop and distribution centers are represented by the Mid‑Atlantic Regional Joint Board, Local 806. OurThe current union contract with the Mid‑Atlantic Regional Joint Board, Local 806 expiredexpires in the first quarter of 2017 and we are currently engaged in negotiations to enter into a new contract.February 2020. Lastly, approximately 110100 Jos. A. Bank sales associates in New York City and four surrounding New York counties are represented by Local 340, New York New Jersey Regional Joint Board, Workers United.  Our most recent collective bargaining agreement covering these employees expires in April 2020.

ITEM 1A.  RISK FACTORS

There are many risks and uncertainties that could adversely affect our business. These risks and uncertainties include, but are not limited to, the risks described below and elsewhere in this report, particularly found in “Forward‑Looking and Cautionary Statements.” The following is not intended to be a complete discussion of all potential risks or uncertainties, as it is not possible to predict or identify all risk factors. Unknown or unidentified additional risks and uncertainties could also adversely affect our business. In addition, the risks described below are not listed in order of the likelihood that the risk might occur or the severity of the impact if the risk should occur.

Risks Associated with our Business Strategy

As noted on page 6,5, our overall business strategy is focused on several initiatives. If we cannot successfully execute our business strategy, our consolidated financial condition, results of operations and cash flows could be materially adversely impacted. There are numerous risks associated with this strategy including, but not limited to, the following:

Our strategy related to the Jos. A. Bank brand may negatively impact our short‑term and long‑term profitability.

Accelerating our turnaround efforts at Jos. A. Bank is a key part of our business strategy. There can be no assurance that strategic initiatives being implemented at Jos. A. Bank will favorably impact the Jos. A. Bank’s operations or will be successfully executed or executed in the time period projected. Any failure to successfully and timely implement these initiatives can be expected to negatively impact Jos. A. Bank’s sales and profitability.

The anticipated benefits of the acquisition of Jos. A. Bank may not be fully realized, which could adversely impact our sales and profitability.

We have devoted and will continue to devote significant managerial attention and resources into the operations of Jos. A. Bank. There continue to be a number of significant risks involved. There can be no assurance that:

If one or more of these events were to occur, it could impact our ability to achieve a substantial portion of the anticipated long-term benefits of the acquisition, which could have a material adverse effect on our sales and profitability.

Our investments in omni‑channel initiatives may not deliver the results we anticipate.

One of our strategic priorities is to further develop an omni‑channel shopping experience for our customers through the integration of our store and digital shopping channels. We continue to explore additional ways to develop anenhance our omni‑channel shopping experience, including further digital integration and customer personalization. These initiatives involve significant investments in information technology systems. If the implementation of our omni‑channel initiatives is not successful, or we do not realize the return on our omni‑channel investments that we anticipate, our operating results would be adversely affected.

We face challenges in managing our store fleet, including limited new store growth potential.

Our growth is dependent, in large part, on our ability to successfully manage our store fleet, including new stores and expansion or remodeling of existing stores and closure of underperforming stores.  We expect to continue opening new stores to increase our sales volume and profitability; however, we believe that our ability to increase the number of new stores in the U.S. and Canada may be limited. Therefore, we may not be able to achieve the same rate of growth asthat we have historically.

Economic conditions and regulatory changes leading up to and following the United Kingdom’s likely exit from the European Union could have a material adverse effect on our business and results of operations.

In June 2016, the UK held a referendum in which voters approved an exit from the European Union (the “E.U.”), commonly referred to as “Brexit.”  Negotiations are expected to commence to determine the future terms of the UK’s relationship with the E.U.

The announcement of Brexit adversely impacted global markets, including currencies, and resulted in a sharp decline in the value of the British pound, as compared to the U.S. dollar and other currencies. Volatility in exchange rates is expected to continue in the short term as the UK negotiates its exit from the European Union. A weaker British pound compared to the U.S. dollar during a reporting period causes local currency results of our UK operations to be translated into fewer U.S. dollars. In fiscal 2016, net sales of our UK operations constituted approximately 6% of our consolidated net sales.

Future adverse consequences arising from Brexit may include economic uncertainty, continued volatility in current exchange rates, potential changes to duties and tariffs and legal uncertainty and potentially divergent national laws and regulations as the UK determines which E.U. laws to replace or replicate. Any of these effects of Brexit, among others, could materially adversely affect our business, results of operations and financial condition.

We have experienced fluctuations in our sales and expect our sales to fluctuate in the future.

Our success over the long-term depends in large part on our ability to improveincrease sales.  For example, if sales at Men’s Wearhouse were to decrease, the effect on our consolidated financial results would be more significant than if sales were to decrease at any of our other brands. We believe that a variety of factors affect our sales and comparable sales results including, but not limited to, consumer confidence and the level of consumer discretionary spending, changes in economic conditions and consumer disposable income, spending patterns and debt levels, consumer credit availability, weather conditions, the timing of certain holiday seasons, the number and timing of new store openings, changes in the popularity of a retail center, the timing and level of promotional pricing or markdowns, store closings, refreshes, relocations and remodels, changes in fashion trends (including casualization of workplace attire)attire and custom clothing) and our merchandise mix or other competitive factors. Comparable sales fluctuations may impact our ability to leverage our fixed direct expenses, including store rent and store asset depreciation, which may adversely affect our financial condition or results of operations.

Our business isSome of our businesses are seasonal.

Our sales and net earnings are subject to seasonal fluctuations.fluctuations and may vary by brand. Our rental product revenues are heavily concentrated in the second and third quarters (prom and wedding season) while the fourth quarter is considered the seasonal low point.  In addition, Jos. A. Bank has historically experienced increased customer traffic during the holiday season and its increased marketing efforts during the holiday season have historically resulted in sales and net earnings generated in the fourth quarter, which are significantly larger as compared to the other three quarters. This trend did not occur in the fourth quarter of 2015 as a result of our decision to change the brand’s promotional cadence. However, the trend resumed in 2016 and we expect the trend to continue in the future. With respect to our corporate apparel sales and operating results, seasonal fluctuations are not significant but the acquisition of new customers or existing customer decisions to rebrand or revise their corporate wear programs can cause significant variations in period results. Because of these fluctuations, in our sales, results for any quarter are not necessarily indicative of the results that may be achieved for the full year.

Economic conditions and regulatory changes leading up to and following the United Kingdom’s likely exit from the European Union could have a material adverse effect on our corporate apparel’s business and results of operations.

In June 2016, the UK held a referendum in which voters approved an exit from the European Union (the “E.U.”), commonly referred to as “Brexit.”  Negotiations are ongoing to determine the future terms of the UK’s relationship with the E.U.

The announcement of Brexit adversely impacted global markets, including currencies, and resulted in a sharp decline in the value of the British pound, as compared to the U.S. dollar and other currencies. Volatility in exchange rates is expected to continue as the UK negotiates its exit from the European Union. A weaker British pound compared to the U.S. dollar during a reporting period causes local currency results of our UK operations to be translated into fewer U.S. dollars. In fiscal 2017, net sales of our UK operations constituted approximately 6% of our consolidated net sales.

Future adverse consequences arising from Brexit may include economic uncertainty, continued volatility in current exchange rates, potential changes to duties and tariffs and legal uncertainty and potentially divergent national laws and regulations as the UK determines which E.U. laws to replace or replicate. Any of these effects of Brexit, among others, could materially adversely affect our business, results of operations and financial condition.

Risks Associated With Our Sourcing and Distribution Strategies

Our sourcing and distribution strategies are subject to numerous risks that could materially adversely impact our consolidated financial condition and results of operations. These risks include, but are not limited to, the following:

The loss of, or disruption in, our distribution centers could result in delays in the delivery of merchandise to our stores.

Retail apparel merchandise forWe rely on our Men’s Wearhouse and Jos. A. Bank stores is received into our Houston, Texas or Hampstead and Eldersburg, Maryland distribution centers whereto manage the inventory is then processed, sortedreceipt, storage, sorting, packing and either placed in back‑stock or shipped to our stores. In the majoritydistribution of our larger markets,merchandise.  As such, we also have separate hub facilities or space within certain stores used as redistribution facilities for their respective geographical areas. Our rental product is also stored in our Houston, Texas distribution center and, to a lesser extent, in five additional distribution facilities located independ on the U.S. and one in Canada. Merchandise for Moores is distributed fromoverall effective management of our distribution center in Montreal, Quebec. The majority of merchandise for our K&G stores is direct shipped by suppliers to the stores while the remainder is managed via a third‑party logistics firm. All corporate apparel merchandise is received into our distribution facilities located in Houston, Texas or Bakersfield, California for our U.S. operations and Long Eaton or Glasgow for our UK operations.

Our business is global in scope and can be impacted by factors beyond our control.

As a result of our international operations and our sourcing of merchandise and rental product from suppliersmanufacturers located outside of the U.S., we face the possibility of greater losses from a number of risks inherent in doing business in international markets and from a number of factors which are beyond our control. Such factors that could harm our financial condition and results of operations and financial condition include, among other things:

We are subject to import risks, including potential disruptions in supply, changes in duties, tariffs, quotas and export restrictions on imported merchandise, and economic, political or other problems in countries from or through which merchandise is sourced or imported.

A significant portion of the products sold in our stores and our corporate apparel operations are sourced from various foreign countries. Political or financial instability, war, civil strife, terrorism, trade restrictions, tariffs, currency exchange rates, transport capacity limitations, labor disruptions, and other factors relating to international trade are beyond our control and could affect the availability and the price of our inventory.  In addition, if we were unexpectedly required to change suppliersmanufacturers or if a suppliermanufacturer were unable to supply acceptable merchandise in sufficient quantities on acceptable terms, particularly as it relates to custom clothing, we could experience a disruption in the supply of merchandise.merchandise or may not be able to fulfill certain customer orders.

The increase in the costs of wool and other raw materials significant to the manufacturer of apparel and the costs of manufacturing could materially affect our results of operations to the extent they cannot be mitigated through price increases and relocation to lower cost sources of supply or other cost reductions. These increased costs could particularly impact our managed contract corporate apparel business which tends to have more long-term contractually committed customer sales arrangements with limited price flexibility.

Any significant interruption in raw materials could cause interruptions at our U.S. tailored clothing factory.

The principal raw material used by our U.S. tailored clothing factory is fabric. Most of the factory’s supply arrangements are seasonal. The factory does not have any long‑term agreements in place with its fabric suppliers; therefore, there can be no assurance that any of such suppliers will continue to do business with us in the future. If a particular mill were to experience a delay due to fire or natural disaster and become unable to meet the factory’s supply needs, it could take a period of up to several months for us to arrange for and receive an alternate supply of such fabric. In addition, import and export delays caused, for example, by an extended strike at the port of entry, could prevent the factory from receiving fabric or other raw materials shipped by its suppliers. Therefore, there could be a negative effect on the ability of the factory to meet its production goals if there is an unexpected loss of a supplier of fabric or other raw materials or a long interruption in shipments from any fabric or other raw material supplier.

Labor union disputes could impact our business.

Approximately 700 of our employees at the factory located in New Bedford, Massachusetts are members of Unite Here, a New England based labor union. Also, approximately 250 employees working in the Jos. A. Bank Hampstead, Maryland tailoring overflow shop and distribution centers are represented by the Mid‑Atlantic Regional Joint Board, Local 806 and, approximately 110 Jos. A. Bank sales associates in New York City and four surrounding New York counties are represented by Local 340, New York New Jersey Regional Joint Board, Workers United. Should a labor dispute arise at any one of our union work sites, we could experience shortages in product to sell in our stores or disruptions in services.

other operational disruptions.  In addition, our corporate apparel business sells uniforms to companies with union workforces.  It is possible that our corporate apparel business could be adversely impacted if a labor dispute arises between a company we supply uniforms to and its union.

Risks Associated with Our Information Technology Systems

We rely on various information technology systems to manage our operations. Information technology systems are subject to numerous risks including unanticipated operating problems, system failures, rapid technological change, failure of the systems thatto operate as anticipated, reliance on third‑party computer hardware,technologies, the lack of available expertise for legacy systems, network and software providers, computer viruses, telecommunication failures, data breaches, denial of service attacks, spamming, phishing attacks, computer hackers and other similar disruptions, any of which could materially adversely impact our consolidated financial condition and results of operations. Additional risks include, but are not limited to, the following:

If we are unable to operate information systems and implement new technologies effectively, our business could be disrupted or our sales or profitability could be reduced.

The efficient operation of our business is dependent on our information systems, including our ability to operate them effectively and successfully implement new technologies, systems, controls and adequate disaster recovery systems. We also maintain multiple internet websites in the U.S. and a number of other countries.Europe. In addition, we must protect the confidentiality of our and our customers’ data. The

or other unauthorized disclosure of information about us or our customers, whether by us or by one of our third‑party service providers, could, among other things:

In this respect, credit card companies required businesses that accept their credit cards to implement chip card recognition systems by October 2015.  Because of delays caused by supplier software and the certification process of chip technology, we expect to complete the implementation of the chip technology during 2017.  As a result, in the event of a data breach before we have the technology in place, we may face liabilities as a result of non-compliance.

Furthermore, the storage and transmission of such data is regulated at the international, federal, state and local levels. Privacy and information security laws and regulation changes, and compliance with those changes, may result in cost increases due to system changes and the development of new administrative processes.  For example, the E.U.’s General Data Protection Regulation ("GDPR"), which will become effective in May 2018, imposes significant new requirements on how we collect, process and transfer personal data with failure to meet GDPR requirements resulting in penalties of up to 4% of our worldwide revenue.  If we or our employees fail to comply with theseexisting laws and regulations or experience a data security breach, our reputation could be damaged, possibly resulting in lost future business, and we could be subjected to fines, penalties, administrative orders and other legal risks as a result of a breach or non‑compliance.

Other Risks Affecting Our Business

Our business is subject to numerous other risks that could materially adversely impact our consolidated financial condition and results of operations. These risks include, but are not limited to, the following:

We may be negatively impacted by competition.

Both the men’s retail and the corporate apparel industries are highly competitive with numerous participants. We compete with traditional department stores, other specialty men’s clothing stores, online retailers, online tuxedoformalwear rental providers, off‑price retailers, manufacturer‑owned and independently‑owned outlet stores, and their e‑commerce channels, independently owned tuxedoindependently-owned formalwear rental stores and other corporate apparel providers.providers, as well as their respective e-commerce channels. In addition, some of our primary competitors sell their products in stores that are located in the same shopping malls or retail centers as our stores, which results in competition for favorable site locations and lease terms in these shopping malls and retail centers. Increased competition or our failure to meet these competitive challenges could result in price reductions, increased marketing expenditures and loss of market share, any of which could have a material adverse effect on our business, financial condition and results of operations.

adverse effect on our business. Failure to comply with local laws and regulations, to maintain an effective system of internal controls and provide accurate and timely financial statement information, or to prevent security breaches could also hurt our reputation. Damage to our reputation or loss of consumer confidence for any of these or other reasons could have a material adverse effect on our results of operations and financial condition, as well as require additional time and resources to rebuild our reputation.

War, acts of terrorism, public health crises, or weather catastrophes (whether or not caused by climate change) could have a material adverse effect on our business.

In the event of war, acts of terrorism or the threat of terrorist attacks, public health crises, or weather catastrophes (whether or not caused by climate change), consumer spending could significantly decrease for a sustained period. In addition, local authorities or shopping center management could close in response to any immediate security concern, public health concern or weather catastrophe such as hurricanes, earthquakes, or tornadoes. Similarly, war, acts of terrorism, threats of terrorist attacks, or a weather catastrophe could severely and adversely affect our offices, distribution centers, or our entire supply chain.

Fluctuations in exchange rates may cause us to experience currency exchange losses.

We are subject to exposure from fluctuations in multiple currency exchange rates including, without limitation, U.S. dollar/British pound (“GBP”) exchange rates, U.S. dollar/Canadian dollar (“CAD”) exchange rates and U.S. dollar/Euro exchange rates as a result of our direct sourcing programs and our operations in foreign countries.

Moores, our Canadian subsidiary, conducts most of its business in Canadian dollars (“CAD”)CAD but purchases a significant portion of its merchandise in U.S. dollars. TheHistorically, the exchange rate between CAD and U.S. dollars has fluctuated historically. Over the past several years,fluctuated. A decline in the value of the CAD againstas compared to the U.S. dollar has weakened. If this valuation does not improve, thenmay adversely impact our Canadian operations as the revenues and earnings of our Canadian operations will be reduced when they are translated to U.S. dollars. Also, the value of our Canadian net assets as expressed in U.S. dollars may decline. Moores utilizesWe utilize foreign currency hedging contracts related to itsour merchandise purchases to limit exposure to changes in U.S. dollar/CAD exchange rates; however, these hedging activities may not adequately protect our Canadian operations from exchange rate risk.

Our UK‑based corporate apparel operations sell their products and conduct their business primarily in British pounds (“GBP”)GBP but purchase most of their merchandise in U.S. dollars or Euros. Historically, the exchange rate between the GBP, Euro and U.S. dollar has fluctuated.  In addition, as a result of the Brexit vote, the value of the GBP against the U.S. dollar has weakened significantly in 2016.  A decline in the value of the GBP as compared to the Euro or U.S. dollar may adversely impact our UK operating results as the cost of merchandise purchases will increase, particularly in relation to longer term customer contracts that have little or no pricing adjustment provisions, and the revenues and earnings of our UK operations will be reduced when they are translated to U.S. dollars. Also, the value of our UK net assets as expressed in U.S. dollars may decline. From time to time, we mayWe utilize foreign currency hedging contracts as well as price renegotiations to limit exposure to some of this risk; however, these activities may not adequately protect our UK operations from exchange rate risk.

Compliance with ever-changing legal, regulatory and corporate governance requirements and standards for accounting could result in increased administrative expenses or litigation and could adversely impact our business, results of operations and reported financial results.

Our policies, procedures and internal controls are designed to help us comply with all applicable laws, regulations, accounting and reporting requirements, including those imposed by the Sarbanes‑Oxley Act of 2002, the Dodd‑Frank Wall Street Reform and Consumer Protection Act, the Affordable Care Act, the payment card industry (PCI), the Public Company Accounting Oversight Board, the SEC and the NYSE. In addition, our business is subject to laws, rules and regulations promulgated by international, national, state and local authorities, including laws, rules and regulations relating to privacy, use of consumer information, credit cards and advertising. All of these laws, rules and regulations and their interpretation are subject to change and often their application may be unclear. As a result, from time to time, we are

Changes in applicable tax regulations and resolutions of tax disputes could negatively affect our financial results.

We are subject to taxation in the U.S. and numerous foreign jurisdictions. We record tax expense based on our estimates of future payments, which include reserves for estimates of probable settlements of foreign and domestic tax audits. At any one time, many tax years are subject to audit by various taxing jurisdictions. The results of these audits and negotiations with taxing authorities may affect the ultimate settlement of these issues. As a result, we expect that throughout the year there could be ongoing variability in our quarterly tax rates as taxable events occur and exposures are evaluated. In addition, our effective tax rate in any given financial reporting period may be materially impacted by changes in the mix and level of earnings or losses by taxing jurisdictions or by changes to existing accounting rules or regulations.

In addition,For example, the Tax Cuts and Jobs Act (the “Tax Reform Act”) was enacted in December 2017, which significantly changes how the U.S. taxes corporations.  As a result, we made certain judgments in interpreting the provisions of the Act as well as significant estimates in calculations used in preparing our fiscal 2017 operating results. The U.S. Treasury Department, the IRS, and other standard-setting bodies could interpret or issue guidance on how provisions of the Tax Reform Act will be applied or otherwise administered that is considering corporate tax reform which may significantly decreasedifferent from our interpretation. Therefore, the corporate tax rate and also impose a border adjustment tax, which would either disallow tax deductions on imported goods, impose a tax directly on imported goods, or impose unilateral tariffs anyultimate impact of which could have a material adverse effectthe Tax Reform Act on our business, financial conditionresults in future periods may change due to changes in interpretations and results of operations.  Moreover, U.S. corporate tax reform could impact domestic tax incentivesassumptions we have made, guidance that may be issued, and credits, repeal other aspectsactions that we may take as a result of the income tax code or eliminate deferrals on un-repatriated earnings for which we have not previously provided U.S. taxes, all of which could cause us to reexamine our existing operations as part of our overall review of tax reform.Tax Reform Act. 

Changes to accounting standards and estimates could materially impact our results of operations, financial position, and cash flows.

Generally accepted accounting principles and the related authoritative guidance for many aspects of our business, including revenue recognition, inventories, goodwill and intangible assets, leases and income taxes, are complex, continually evolving and involve subjective judgments. For example, recently issued authoritative guidance for lease accounting will result in a significant increase in our long-term assets and liabilities given we have a material impact on our financial position orconsiderable number of operating leases and may cause the perception that we are more highly leveraged. These and other future changes in accounting rules or changes in the underlying estimates, assumptions or judgments by our management could have a material impact on our results of operations, financial position and cash flows.

We could incur losses due to impairment on long‑lived assets, goodwill and intangible assets.

Under generally accepted accounting principles, we review our long‑lived assets for impairment whenever economic events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. Identifiable intangible assets with an indefinite useful life, including goodwill, are not amortized but are evaluated annually for impairment. A more frequent evaluation is performed if events or circumstances indicate that impairment could have occurred. In fiscal 2015, we recorded $1.24 billion of goodwill and intangible asset impairment charges related to Jos. A. Bank. In the future, significant negative industry or general economic trends, disruptions to our business and unexpected significant changes or planned changes in our use of the assets may result in additional impairments to our goodwill, intangible assets and other long‑lived assets. Any reduction in or impairment of the value of goodwill or intangible assets will result in a charge against earnings, which could have a material adverse impact on our reported results of operations and financial condition.

Our advertising, marketing and promotional activities have been the subject of review by state regulators and subject to lawsuits, specifically at Jos. A. Bank.

Jos. A. Bank has in the past been, and may from time to time in the future be, required to respond to inquiries from State Attorneys General related to its advertising practices.  These advertising practices have also been, and continue to be, the subject of class action litigation.  In addition, it is possible that the advertising, marketing and promotional activities of all our other brands may be reviewed by state or other regulators.regulators or become the subject of litigation. Although we endeavor to monitor and comply with all applicable laws and regulations to ensure that all advertising, marketing and promotional activities comply with all applicable legal requirements, many of the applicable legal requirements involve subjective judgments. It is possible that any resolution we may reach with any governmental authority or the results of any litigation may materially impact our current or future planned marketing program and could have an adverse impact on our business.

We are subject to various proceedings, lawsuits, disputes, and claims, from time to time, which could adversely affect our results of operations, financial position, and cash flows.

As a multinational company, we are subject to various proceedings, lawsuits, disputes, and claims (“Actions”) arising in the ordinary course of business.  Many of these Actions raise complex factual and legal issues and are subject to numerous uncertainties.  Actions are filed against us from time to time and include commercial, securities, intellectual property, customer, employment and data privacy claims, including class action lawsuits.  Current Actions are in various procedural stages and some are covered in whole or in part by insurance.  We cannot predict with assurance the outcome of any of the Actions brought against us and an adverse result in any Actions could have an adverse impact on our financial results. 

Rights of our shareholders may be negatively affected if we issue any of the shares of preferred stock which our Board of Directors has authorized for issuance.

We have available for issuance 2,000,000 shares of preferred stock, par value $.01 per share. Our Board of Directors is authorized to issue any or all of this preferred stock, in one or more series, without any further action on the part of shareholders. The rights of our shareholders may be negatively affected if we issue a series of preferred stock in the future that has preference over our common stock with respect to the payment of dividends or distribution upon our liquidation, dissolution or winding up. See Note 13 of Notes to Consolidated Financial Statements for more information.

Risks Associated with Our Indebtedness

There are numerous risks associated with our indebtedness including, but not limited to, the following:

Our current level of indebtedness could adversely affect our ability to raise additional capital to fund our operations, limit our ability to react to changes in the economy or our industry, expose us to interest rate risk to the extent of our variable rate debt and prevent us from meeting our obligations under the Credit Facilities or the indenture governing the Senior Notes.

In connection with the acquisition of Jos A. Bank,2014, we entered into a $1.1 billion aggregate principal amount senior secured facility (the “Term Loan Facility”) and a.  In October 2017, we amended our then existing $500.0 million asset‑based revolving facility in part to increase the principal amount available to $550.0 million and extend the maturity date to October 2022 (the amended “ABL Facility”)  (the ABL Facility together with the Term Loan Facility, the “Credit Facilities”). In addition, in 2014, we issued $600.0 million in aggregate principal amount of our 7.0% Senior Notes due 2022 (the “Senior Notes”). After entering into the Credit Facilities and completing the offering of the Senior Notes, our indebtedness has increased substantially. As of January 28, 2017,February 3, 2018, our total indebtedness is approximately $1.6$1.4 billion. In addition, we have up to $414.8$505.5 million of additional borrowing availability under the ABL Facility, excluding letters of credit totaling approximately $29.4$37.3 million issued and outstanding.

Our indebtedness could have important consequences, including:

Despite our high indebtedness level, we will still be able to incur significant additional amounts of debt, which could exacerbate the risks associated with our substantial indebtedness.

We and our subsidiaries may be able to incur substantial additional indebtedness in the future. Although the Credit Facilities and the indenture governing the Senior Notes contain restrictions on the incurrence of additional indebtedness, these restrictions are subject to a number of significant qualifications and exceptions, and, under certain circumstances, the amount of indebtedness that could be incurred in compliance with these restrictions could be substantial. If new debt is added to our and our subsidiaries’ existing debt levels, the related risks that we now face would increase. In addition, the Credit Facilities and the indenture governing the Senior Notes will not prevent us from incurring obligations that do not constitute indebtedness under those agreements. As of January 28, 2017, we have up to $414.8 million of additional borrowing availability under the ABL Facility, excluding letters of credit totaling approximately $29.4 million issued and outstanding.

We may not be able to generate sufficient cash to service all of our indebtedness and fund our working capital and capital expenditures, and we may be forced to take other actions to satisfy our obligations under our indebtedness, which may not be successful.

Our ability to make scheduled payments on our indebtedness will depend upon our future operating performance and on our ability to generate cash flow in the future, which is subject to general economic, financial, business, competitive, legislative, regulatory and other factors that are beyond our control. There can be no assurance that our business will generate sufficient cash flow from operations, or that future borrowings, including borrowings under the ABL Facility, will be available to us in an amount sufficient to enable us to pay our indebtedness or to fund our other liquidity needs. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources.”

If our cash flows and capital resources are insufficient to fund our debt service obligations, we could face substantial liquidity problems and could be forced to reduce or delay investment and capital expenditures or to dispose of material assets or operations, seek additional equity capital or restructure or refinance our indebtedness. We may not be able to affect any such alternative measures, if necessary, on commercially reasonable terms or at all and, even if successful, such alternative actions may not allow us to meet our scheduled debt service obligations. The Credit Facilities and the indenture that governs the Senior Notes contain restrictions on our ability to dispose of assets and use the proceeds from any such disposition.

In addition, we rely to a certain extent, on our subsidiaries to generate cash. Accordingly, repayment of our indebtedness, is dependent, to a certain extent, on the generation of cash flow by our subsidiaries and their ability to make such cash available to us, by dividend, debt repayment or otherwise. Each of our subsidiaries are distinct legal entities and they do not have any obligation to pay amounts due on the notes or to make funds available for that purpose (other than the subsidiary guarantors in connection with their guarantees) or other obligations in the form of loans, distributions or otherwise. Our subsidiaries may not generate sufficient cash from operations to enable us to make principal and interest payments on our indebtedness or to fund our and our subsidiaries’ other cash obligations.

For example, at January 28, 2017, cash and cash equivalents held by foreign subsidiaries totaled $68.0 million. Under current tax laws and regulations, if cash and cash equivalents held outside the U.S. are repatriated to the U.S., in certain circumstances we may be subject to additional U.S. income taxes and foreign withholding taxes. We currently do not intend to repatriate amounts held by foreign subsidiaries. As such, amounts held by our foreign subsidiaries are not expected to be available to repay our indebtedness.

If we cannot make scheduled payments on our debt, we will be in default and, as a result, the holders of the Senior Notes could declare all outstanding principal and interest to be due and payable, the lenders under the Credit Facilities could declare all outstanding amounts under such facilities due and payable and, with respect to the ABL Facility, terminate their commitments to loan money, and, in each case, foreclose against the assets securing the borrowings under the Credit Facilities, and we could be forced into bankruptcy or liquidation.

If our indebtedness is accelerated, we may need to refinance all or a portion of our indebtedness before maturity. There can be no assurance that we will be able to refinance any of our indebtedness, including the Credit Facilities, on commercially reasonable terms or at all. There can be no assurance that we will be able to obtain sufficient funds to enable us to repay or refinance our debt obligations on commercially reasonable terms, or at all.

The agreements and instruments governing our debt impose restrictions that may limit our operating and financial flexibility.

The Credit Facilities and the indenture governing the Senior Notes contain a number of significant restrictions and covenants that may limit our ability to:

If our indebtedness is accelerated, we may not be able to repay our debt or borrow sufficient funds to refinance it. Even if we are able to obtain new financing, it may not be on commercially reasonable terms, on terms that are acceptable to us, or at all. If our debt is in default for any reason, our business, financial condition and results of operations could be materially and adversely affected. In addition, complying with these covenants may also cause us to take actions that make it more difficult for us to successfully execute our business strategy and compete against companies that are not subject to such restrictions.

Our variable rate indebtedness subjects us to interest rate risk, which could cause our debt service obligations to increase significantly.increase.

We are exposed to interest rate risk through our variable rate borrowings under the Credit Facilities. Borrowings under such facilities bear interest at a variable rate, based on a LIBOR rate, plus an applicable margin. Interest rates are currently at relativelyhistorically low levels. Iflevels but are expected to increase. As interest rates increase, our debt service obligations on the variable rate indebtedness will increase even though the amount borrowed remainedremains the same, and our net income and cash flows, including cash available for servicing our indebtedness, will correspondingly decrease.  Assuming all capacity under the ABL FacilityAs LIBOR is fully drawn, each one percentage point change in interest rates would result in approximately a $5.0 million change in annual interest expense. Assuming LIBOR surpassedabove the 1% LIBOR floor provision on our Term Loan, we would beare exposed to interest rate risk on suchour Term Loan. To partially mitigate such interest rate risk, we entered into an interest rate swapswaps to exchange variable interest rate payments for fixed interest rate payments for a portion of the outstanding Term Loan balance. At January 28, 2017,February 3, 2018, the notional amount of the interest rate swapswaps totaled $330.0$410.0 million. In addition, in 2015, we entered into the Incremental Facility Agreement No. 1 to the credit agreement governing the Term Loan to refinance $400.0 million principal amount of term loans that bore interest at a variable rate with $400.0 million principal amount of new term loans, which bear interest at a fixed rate of 5.0% per annum.

After consideration of the swapswaps and the refinancing, each as of February 3, 2018, 87% of our total debt was at a fixed rate with the remainder at a variable rate.  As a result, we believe our interest rate risk is substantially mitigated.  At February 3, 2018, the effect of a one percentage point change in interest rates would result in an approximate $3.2$1.8 million change in annual interest expense on our Term Loan. At February 3, 2018, assuming all capacity under the ABL Facility is fully drawn, each one percentage point change in interest rates would result in approximately a $5.5 million change in annual interest expense.

ITEM 1B.  UNRESOLVED STAFF COMMENTS

None.

ITEM 2.  PROPERTIES

As of January 28, 2017,February 3, 2018, we operated 1,5411,351 retail apparel and tuxedo rental stores in 50 states, the District of Columbia and Puerto Rico and 126 retail apparel stores in ten Canadian provinces.  As of January 28, 2017,February 3, 2018, our stores aggregated approximately 9.59.3 million square feet.  Almost all of these stores excluding our tuxedo shops within Macy’s, are leased, generally for five to ten year initial terms with one or more

We own or lease properties in various parts of the U.S. and Canada to facilitate the distribution of retail and rental product to our stores. We own or lease properties in Houston, Texas, Hampsteadvarious parts of the U.S. and Eldersburg, Maryland and,UK to facilitate the distribution of our corporate apparel product, various parts of the UK.product. Total leased and owned space for distribution is approximately 2.3 million square feet and 3.23.3 million square feet, respectively.

In addition, we have primary office locations in Houston, Texas, Fremont, California, New York, New York and Hampstead, Maryland with additional satellite offices in other parts of the U.S., Canada, Europe and Asia. We lease approximately 0.5 million square feet and own approximately 0.3 million square feet of office space.

ITEM 3.  LEGAL PROCEEDINGS

We are involved in various routine legal proceedings, including ongoing litigation. Management believes that none of these matters will have a material adverse effect on our financial position, results of operations or cash flows. See Note 18 of Notes to Consolidated Financial Statements for a discussion of our legal proceedings.

ITEM 4.  MINE SAFETY DISCLOSURES

Not applicable.

PART II

ITEM 5.  MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Through January 29, 2016, our common stock traded on the NYSE under the symbol “MW”. Beginning on February 1, 2016, Tailored Brands replaced Men’s Wearhouse as the publicly held corporation and itsOur common stock trades on the NYSE under the trading symbol “TLRD”.

“TLRD.” The following table sets forth, on a per share basis for the periods indicated, the high and low sale prices per share for our common stock as reported by the NYSE and the quarterly dividends declared on each share of common stock:

Performance Graph

The following Performance Graph and related information shall not be deemed “soliciting material” or to be “filed” with the Securities and Exchange Commission, nor shall such information be incorporated by reference into any future filing under the Securities Act of 1933 or Securities Exchange Act of 1934, each as amended, except to the extent that the Company specifically incorporates it by reference into such filing.

ITEM 6.  SELECTED FINANCIAL DATA

The following selected statement of earnings (loss) data and, balance sheet and cash flow information for the fiscal years indicated has been derived from our audited consolidated financial statements. The Selected Financial Data should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the Consolidated Financial Statements and notes thereto. References herein to years are to the Company’s 52‑week or 53‑week fiscal year, which ends on the Saturday nearest January 31 in the following calendar year. For example, references to “2016”“2017” mean the fiscal year ended January 28, 2017.February 3, 2018. All fiscal years for which financial information is included herein had 52 weeks with the exception of fiscal 2012,2017, which ended on February 2, 20133, 2018 and had 53 weeks.