Men's wear retailer JoS A Bank Clothiers Inc is expanding into the tuxedo rental business, and will be testing its potential from this month with a launch in around 5% of its 474 stores.

If successful, the company says it will roll out the initiative to more than half of its stores in the spring.

"Although we are a national leader in the sales of tuxedos, we have not offered the specific formalwear products and services that are most commonly used by wedding parties," said president and CEO Neal Black.

He added: "There are very few national companies in this business and, with over 4.9m customers in our database, this business offers a significant opportunity."

To minimise its investment and risk, JoS A Bank has partnered with a national distributor who will own the inventory and deliver the orders to its stores.

But it says that while incremental sales volume will add to its stores' operating margins, the gross profit rate will come in lower than its merchandise sales.

"The tuxedo rental business has the potential to generate significantly higher gross margins if we choose to invest in our own infrastructure in the future," noted CFO David Ullman.