Tuxedo hub relies on stores even in online age
War heroes have passed, factories have faded, old-line stores fight for survival in an online era. But something modern has emerged in Memphis — a massive tuxedo warehouse geared for the internet.
With all the talk of traditions disrupted by online giants like Amazon, here’s a little reminder that storefronts can still matter in our digital age. Go back a few years. On paper, the deal looked good. It was all about reaching customers online. No need for renting retail space or paying store clerks. People living throughout the country would find your website on their computers. Digital was the future.
The deal landed in Memphis in 2014. The city-county EDGE Board awarded ACS Clothing Group property tax cuts worth $1 million.
The Scottish company, Europe’s largest renter of formal wear, agreed to step into Memphis.
Backed by a $27 million loan from the British Growth Fund, ACS took over a warehouse east of Memphis International Airport big enough to contain a dozen football fields.
The building took up a block in one of those look-alike industrial parks off Shelby Drive. Soon it contained something special. Machinery could dry clean, press, steam, unwrinkle, sort, store and ship 1 million tuxedos every year.
Place a rent order for, say, the $160 Justin Alexander Storm Gray Notch evening suit for groom and groomsmen. And the suits would come out of 4400 Quality Drive, each bundled on a hangar with shoes, shirt, pants, jacket and tie.
Overseeing the online trade was a name in American retailing, Peter Abruzzo, once a big deal at national retailer Men’s Wearhouse. ACS, formed by Glasgow apparel merchants Richard and Joe Freeman in 1997, hired the Chicago retail exec lead its Suit-Up and Xedo brands in the United States from the Memphis warehouse.
Depending on the Memphis tuxedo hub, bigger than anything like it in the country, Abruzzo marched into formal wear’s digital future.
Instead of opening stores, he’d rent apparel directly to customers who found Suit-Up and Xedo online or saw samples in department stores such as J.C. Penney. Overnight air service would get the garments to the customers and then get the clothing back to Memphis for cleaning and re-rental. That was the plan. ACS officials told the EDGE board the distribution center eventually would employ up to 125 people.
What happened next?
‘Tuxedo King’
Mr. Abruzzo is now employed elsewhere.
And the tuxedo hub off Shelby Drive has a new owner. He intends to create a tuxedo empire. He wants to do this using actual stores.
It turns out Americans want to see and touch formal wear before ordering, one reason the Memphis hub shipped only about 250,000 tuxedos last year, below the 1 million unit capacity.
The new owner is a small business run by Keith Ladsten. He’s a former national sales manager for tuxedo maker Lord West Formalwear, a name briefly famous in America for the sensational abduction of its owner, the late Harvey J. Weinstein, whom the New York Post labeled the “Tuxedo King” as the story of his kidnapping by a Lord West employee unfolded.
After New York police officers found the elderly manufacturer alive at the bottom of a narrow hole 14 feet below street level, where he had been held for ransom for two weeks, Weinstein explained his survival: He had been toughened in 1945 by the hardfought Battle of Iwo Jima, where he served as a U.S. Marine Corps machine gunner.
When he came out of the crypt in 1993, his firm was known as the nation’s leading manufacturer of formal
wear, supplying brand names including Pierre Cardin and Ralph Lauren. Within a decade, change would come, ushered in by global trade and data flooding the internet.
By the time Ladsten left Lord West in 2006, the apparel factory in New York’s Queens borough was the last big U.S. maker of formal wear. The plant would soon close.
Summons to Memphis
Ladsten stayed in the apparel business, but steered clear of making clothes. Manufacturing had become unprofitable in the United States. Lowwage nations such as China, Guatemala and Vietnam made clothes at less cost. As imports surged, he hewed to the retail side.
Ladsten and his wife, Bethann Froistad — daughter of a former Iowa State University basketball star — bought Randall’s Tip Top Tux of Sioux City, Iowa. The small chain rented clothing for nearby proms and weddings. Ladsten took over Tip Top. Then he traveled.
Backed in part by money from Boost and Co., a London investment bank that had loaned ACS $3.8 million in 2016, Ladsten set out to buy tuxedo rental chains and roll them into the new Tip Top Tux LLC of Sioux City.
One year ago, Tip Top bought Al’s Formal Wear, a well-known Houston brand with dozens of outlets in cities throughout the lower Great Plains. Tip Top now controls 98 stores. Ladsten estimates the store count within a few years will reach 250 shops, primarily in the Southeast.
He has no plans for widespread store closings. He needs stores, and cites this trend: Today’s typical groom is 29, up from 23 in 1970. They have money to spend on weddings. With money comes a desire for styles a step out of the mainstream. Patrons often must see a wide array of styles before they find what they want.
Online marketing drew customers into the stores. Then they might comb through 28 different looks. With all the styles in the showroom, where to keep the actual garments before they were shipped was the issue. Keep them in the store? Put them in a warehouse? Ladsten discovered an answer in Memphis.
Tip Top had started doing business with Suit-Up last fall. Before winter had set in, Ladsten decided to buy the tuxedo hub.
It turns out Americans want to see and touch formal wear before ordering, one reason the Memphis hub shipped only about 250,000 tuxedos last year, below the 1 million unit capacity.
‘Only facility like it’
War heroes have passed, factories have faded, old-line merchants fight for survival. But something else has emerged, at least in Memphis — a logistics industry of 55,000 workers, almost all of them geared to the internet age.
ACS set up a processing center able to supply dozens of styles to hundreds of thousands of customers throughout the nation from one warehouse, and move the product seamlessly in and out overnight by cargo trucks or FedEx and UPS air freighters. Almost half the 244,000-square-foot building consists of open floor space available for cleaned garments in storage awaiting orders.
“It’s the only facility like it in the U.S.,” Ladsten said.
He figures the Memphis hub can handle the demand of 250 stores without having to add much machinery. That’s one reason Ladsten likes his new acquisition.
The hub can add workers and shifts — he said employment could reach 140 workers at full capacity — without having to divert Tip Top’s money away from new retail acquisitions.
He plans to apply to the EDGE board to continue the PILOT tax cut. Even with all the garment orders expected to flow in, though, he has no plans to ramp up a Lord West-style factory.
“I don’t see us making formal wear. That business is gone. Our mantra is to pick out what it is you do best,” Ladsten said, “and then do it right.”
Ted Evanoff, business columnist of The Commercial Appeal, can be reached at evanoff@commercialappeal.com and (901) 529-2292.