Letter to our Stakeholders

Elevating Our Value Proposition

In 2009, we made the strategic decision to use our position of strength to aggressively pursue market share. In executing this strategy, we shifted from an everyday value posture to an elevated promotional stance and increased our branded presence to entice customers that equate brands with quality. We will continue to make sure that our current and potential customers clearly understand our value proposition.

Tuxedo Operations

Despite the macroeconomic weakness, our tuxedo rental business performed well in 2009. We continued to enhance our retail merchandise assortment in our Men’s Wearhouse and Tux stores, most notably suit separates, dress shirts and ties to accommodate our younger prom and wedding tuxedo rental customer.

In 2010, we introduced our offer of a free suit for qualified wedding parties, which we hope will drive a considerable amount of tuxedo revenue, while introducing new customers to our quality merchandise and outstanding customer service. Going forward, we believe that our leading market position gives us a strong base for future growth.

Building The K&G Brand

K&G made incremental progress in 2009 as leadership continued to implement new products and pricing strategies. During the year, we expanded our women’s assortment and experienced an 11 percent increase in comparable store sales in that category.