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NEW YORK, United States — Department store operator Macy's Inc and Tailored Brands Inc have agreed to wind down operations of a tuxedo rental license agreement, the companies said on Wednesday.
Reservations at The Tuxedo Shops at Macy's will continue until June 1 and the operations will wind down by July 14, the companies said.
The initiative did not generate the revenue that both companies had envisioned, Tailored Brands chief executive officer Doug Ewert said in a statement.
The agreement was signed between Macy's and Men's Wearhouse on June 9, 2015.
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Men's Wearhouse said last year it would become Tailored Brands, a holding company that also includes brands such as Jos. A. Bank and K&G.
Tailored Brands, which had flagged concerns with the performance of the Macy's tuxedo business in its fourth-quarter earnings, said on Wednesday that it would record one-time charges of about $17 million related to the winding down, of which $2.5 million would be non-cash costs.
The company had recorded an asset impairment charge of $14 million in the fourth quarter related to fixed assets in the Macy's stores.
By Karina Dsouza; editor: Sriraj Kalluvila.
