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Looking at JOSB's balance sheet in more detail, it struck me that the company's inventory is going up and up. The company has consistently maintained a high inventory and states that because of its classic styling it does not run the risk of having dated merchandise. So be it.

The following is a bit dated. I need to have a look at the latest 10-Q, as this is based on 10-Ks and the latest one is nearly a year old. Inventories are in millions, selling space is in thousands of square feet. Both are reported at the end of the fiscal year. Here's what the balance sheet shows:


year 2007 2006 2005 2004
inventories 207 183 177 128
selling space 1935 1745 1543 1318

sales/sq ft 312 313 301 283
inventory/sq ft 107 105 114 97
days in inventory 335 322 364 316


Annual sales per square foot seem commendable. According to a survey by HdL companies, the annual sales per square foot reported by JOSB are at the upper end for men's retail business attire. For whatever reason, in 2005 the company made a decision to increase its inventory per square foot by nearly 17% while sales per square foot grew by 6%. Inventory does not seem to have recovered completely from this increase and needs to come down to better match sales per square foot. The net effect is a slowly recovering cash conversion cycle, with a noticeable slip-up starting in 2007, and potential problems as sales slow.

That said, the market seems to be punishing the company excessively.
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