By Paul Pannone

Discrepancies of information prove chosing reliable data for your business is imperative. We questioned cited data provided by IBISWorld used in a story by TheStreet.com claiming that Men’s Wearhouse rents one out of every two tuxedos in the US market. The result was a  re-examination of the data provided and a clarifying statement. 

Nikoleta Panteva of IBISWorld told eWedNewz,” According to the Men’s Wearhouse annual report released on March 30, 2011, their revenue for the tuxedo rental business was $364.3 million in 2010, up 9% from the $334.1 million in 2009 (page 48 of attached company 10-K report). I stand corrected on my earlier numbers, where I looked at the incorrect data. Nevertheless, while the company (and its tuxedo rental business) has grown, the industry overall has declined from $769.3 million in 2007 (in constant 2010 dollars) to $759.4 million in 2011 (see IBISWorld report attached). These numbers are based on US Economic Census data. Therefore, the Men’s Wearhouse accounts for about 50% of the industry:  $364.3m/$736.1m = 49.5% (Men’s Wearhouse and Tux 2010 revenue, divided by industry 2010 revenue). It is very likely that the Men’s Wearhouse rents one out of every three tuxedos, but accounts for 50% of revenue as the company may be charging a price premium above that of the average rental store. Smaller operators typically have to offer lower prices in order to effectively compete against well-known brands such as the Men’s Wearhouse. What the numbers indicate is that the Men’s Wearhouse accounts for 50% of the industry’s revenue, regardless of what percentage of tuxedos they rent out. It is a matter of revenue (quantity x price) versus tuxedos (quantity alone). Additionally, the quote from the company’s earnings call states that their “estimates indicate that [they] rent in excess of one out of every three tuxedos in the United States” which does not commit them to 33%, but leaves room for a higher share of total tuxedos rented. Please see our industry report and the company’s most recent annual report, attached, for reference.”

eWedNewz discussed the reply with multiple adjunct sources to the men’s formal wear group including financial, ex and current CEOs of manufacturing, advertising, wedding analysts, including other sources of wedding information. In subsequent discussions formal wear experts questioned the data further saying, “The report is partly correct but leaves much to be desired. For instance, how can they give a snapshot view of the men’s formal wear rental business without including its manufacturers and largest buyers like Jim’s formal wear? Did they interview Savvi, or Al’s formal wear, etc?” Most disagree that Men’s Wearhouse has captured 50% of the market, no matter how the numbers are sliced and diced.

When updating this story we searched for the original story by TheStreet citing the faulty data by IBISWorld but the story seems to have disappeared.

eWedNewz continues to question validity of data wanting to know how sources arrive at numbers. Sources that claim to have mystical potions unique only to them are suspect, as a growing number of wedding experts say data is reflective of who is gathering the data and who analyzes the findings.

eWedNewz welcomes your thoughts. Post them to this article or, if you prefer, email or call Paul@ewednewz.com – 516-312-0090.

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