Men's Wearhouse shares fall on corporate order delays

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(Global Markets) - Shares of Men's Wearhouse Inc (MW.N) fell their most in more than two years on Thursday after the clothing retailer forecast a weak second-quarter profit due to delays in corporate orders for uniforms in the UK.

The retailer had earlier said corporate apparel sales, which account for about 10 percent of its business, would decline in the first and second quarters, but still disappointed investors on Wednesday with a bigger-than-expected fall.

The company's corporate apparel segment, which provides uniform and workwear, has been dogged by delays in orders from some of its customers, which include Lloyds Banking Group PLC (LLOY.L) and British Gas.

Men's Wearhouse entered into the UK market in 2010 with its acquisition of Dimensions Clothing and certain assets of Alexandra Plc. Since then the business has grown and the company expects it to account for about 15 percent of its total earnings.

Baldwin Anthony Securities analyst William Baldwin said that despite the current weakness in corporate apparel, it remains an attractive business for the retailer.

Baldwin estimates that the global market for corporate apparel is as big as $13 billion and said the retailer may look to do more deals.

Corporate apparel sales fell 16.4 percent to $49.9 million in the first quarter, and are expected to decline by 17-18 percent in the current quarter, though the business is expected to pick up in the second half of the year with the rollout of new uniforms.

Shares of Men's Wearhouse, which rents out one in every three tuxedos in North America, fell 18 percent to $29.08 on Thursday afternoon on the New York Stock Exchange. They touched a six-month low of $29.02 earlier in the day.

(Reporting by Juhi Arora in Bangalore; Editing by Supriya Kurane, Saumyadeb Chakrabarty)