MENS WEARHOUSE INC - 10-K Annual Report

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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-K

(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

FOR THE FISCAL YEAR ENDED FEBRUARY 1, 2003

OR

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934

FOR THE TRANSITION PERIOD FROM TO

COMMISSION FILE NUMBER 1-16097

THE MEN'S WEARHOUSE, INC.
(Exact name of Registrant as Specified in its Charter)

TEXAS 74-1790172
(State or Other Jurisdiction of (IRS Employer
Incorporation or Organization) Identification Number)

5803 GLENMONT DRIVE 77081-1701
HOUSTON, TEXAS (Zip Code)
(Address of Principal Executive Offices)

(713) 592-7200
(Registrant's telephone number, including area code)

SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:

SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
NONE

Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [ ]

Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of the registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [ ]

Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act). Yes [X] No [ ]

The aggregate market value of the voting stock held by non-affiliates of
the registrant, based on the closing price of shares of common stock on the New
York Stock Exchange on August 2, 2002, was approximately $626.0 million.

The number of shares of common stock of the registrant outstanding on April
25, 2003 was 39,543,750, excluding 3,055,864 shares classified as Treasury
Stock.

DOCUMENTS INCORPORATED BY REFERENCE

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FORM 10-K REPORT INDEX

PART I

ITEM 1. BUSINESS

GENERAL

The Men's Wearhouse began operations in 1973 as a partnership and was
incorporated as The Men's Wearhouse, Inc. (the "Company") under the laws of
Texas in May 1974. Our principal corporate and executive offices are located at
5803 Glenmont Drive, Houston, Texas 77081-1701 (telephone number 713/592-7200),
and at 40650 Encyclopedia Circle, Fremont, California 94538-2453 (telephone
number 510/657-9821), respectively. Unless the context otherwise requires,
"Company", "we", "us" and "our" refer to The Men's Wearhouse, Inc. and its
wholly owned or controlled subsidiaries.

Our website address is www.menswearhouse.com. Through the investor
relations section of our website, we provide free access to our annual reports
on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and
all amendments to those reports as soon as reasonably practicable after such
material is electronically filed with or furnished to the Securities and
Exchange Commission ("SEC"). The SEC also maintains a website that contains the
Company's filings at www.sec.gov.

THE COMPANY

We are one of the largest specialty retailers of menswear in the United
States and Canada. At February 1, 2003, our U.S. operations included 575 stores
in 44 states and the District of Columbia, primarily operating under the brand
names of Men's Wearhouse and K&G, with approximately 26% of our locations in
Texas and California. At February 1, 2003, our Canadian operations included 114
stores in 10 provinces operating under the brand name of Moores Clothing for
Men.

MEN'S WEARHOUSE

Under the Men's Wearhouse brand, we target middle and upper-middle income
men by offering quality merchandise at everyday low prices. In addition to
value, we believe we provide a superior level of customer service. Men's
Wearhouse stores offer a broad selection of designer, brand name and private
label merchandise at prices we believe are typically 20% to 30% below the
regular prices found at traditional department and specialty stores. Our
merchandise includes suits, sport coats, slacks, business casual, sportswear,
outerwear, dress shirts, shoes and accessories. We concentrate on business
attire that is characterized by infrequent and more predictable fashion changes.
Therefore, we believe we are not as exposed to trends typical of more
fashion-forward apparel retailers, where significant markdowns and promotional
pricing are more common. At February 1, 2003, we operated 505 Men's Wearhouse
stores in 44 states and the District of Columbia. These stores are referred to
as "Men's Wearhouse stores" or "traditional stores".

We also began a tuxedo rental program in selected Men's Wearhouse stores
during 1999. We believe this program generates incremental business for us
without significant incremental personnel or real estate costs and broadens our
customer base by drawing first-time and younger customers into our stores. We
completed the rollout of this program to our traditional stores during the first
quarter of fiscal 2002 and, as of our fiscal year end, offered tuxedo rentals in
495 Men's Wearhouse stores.

K&G

Under the K&G brand, we target the more price sensitive customer. The K&G
brand was acquired as a result of our combination with K&G Men's Center, Inc. in
June 1999 in a transaction accounted for as a pooling of interests (see Note 2
of Notes to Consolidated Financial Statements). Prior to the combination, our
Value Priced Clothing ("VPC") subsidiary targeted the market for the more price
sensitive customer. During 2001, VPC merged into K&G, with the five former VPC
stores continuing operations under the name The Suit Warehouse ("TSW"). At
February 1, 2003, we operated 65 K&G stores in 23 states and four TSW stores in
metropolitan Detroit and one in Ohio. Twenty-four of the K&G stores offer
ladies' career apparel that is also targeted to the more price sensitive
customer.

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We believe that K&G's more basic, value-oriented superstore approach
appeals to certain customers in the apparel market. K&G offers first-quality,
current-season apparel and accessories comparable in quality to that of
traditional department and specialty stores, at everyday low prices we believe
are typically 30% to 70% below the regular prices charged by such stores. K&G's
merchandising strategy emphasizes broad assortments across all major categories,
including tailored clothing, casual sportswear, dress furnishings, footwear and
accessories. This merchandise selection, which includes brand name as well as
private label merchandise, positions K&G to attract a wide range of customers in
each of its markets. As with the Men's Wearhouse brand, K&G's philosophy of
delivering everyday value distinguishes K&G from other retailers that adopt a
more promotional pricing strategy.

MOORES

On February 10, 1999, we combined with Moores Retail Group Inc. ("Moores"),
a privately owned Canadian corporation, in a transaction accounted for as a
pooling of interests (see Note 2 of Notes to Consolidated Financial Statements).
Moores is one of Canada's leading specialty retailers of menswear, with 114
stores in 10 Canadian provinces at February 1, 2003. Moores focuses on
conservative, basic tailored apparel. This limits exposure to changes in fashion
trends and the need for significant markdowns. Moores' merchandise consists of
suits, sport coats, slacks, business casual, dress shirts, sportswear,
outerwear, shoes and accessories. Moores typically offers a full assortment of
suits and sport coats with prices of suits generally ranging from Can$149 to
Can$369.

Moores distinguishes itself from other Canadian retailers of menswear by
manufacturing a significant portion of the tailored clothing for sale in its
stores. Moores conducts its manufacturing operations through its wholly owned
subsidiary, Golden Brand Clothing (Canada) Ltd. ("Golden Brand"), which is the
second largest manufacturer of men's suits and sport coats in Canada. Golden
Brand's manufacturing facility in Montreal, Quebec, includes a cutting room,
fusing department, pant shop and coat shop. At full capacity, the coat shop can
produce 13,000 units per week and the pant shop can produce 23,000 units per
week. As a result of the vertical integration and the related cost savings,
Moores is able to provide greater value to its customer by offering a broad
selection of quality merchandise at everyday low prices, which the Company
believes typically range from 20% to 30% below the regular prices charged by
traditional Canadian department and specialty stores. Beginning in 1999, Golden
Brand also manufactures product for Men's Wearhouse stores.

EXPANSION STRATEGY

Our expansion strategy includes:

- opening additional Men's Wearhouse and K&G stores in new and existing
markets,

- expanding our tuxedo rental program to Moores stores,

- identifying strategic acquisition opportunities, including but not
limited to international opportunities,

- testing expanded merchandise categories in selected stores, and

- expanding our business to include complementary products and services.

In general terms, we consider a geographic area served by a common group of
television stations as a single market.

On a limited basis, we have acquired store locations, inventories, customer
lists, trademarks and tradenames from existing menswear retailers in both new
and existing markets. We may do so again in the future. At present, in 2003 we
plan to open an additional 10 new Men's Wearhouse stores and seven new K&G
stores, to close two Men's Wearhouse stores and six K&G stores, to expand and
relocate up to 19 existing Men's Wearhouse stores and up to four existing K&G
stores and to continue expansion in subsequent years. We believe that our
ability to increase the number of traditional stores in the United States above
550 will be limited. However, we believe that additional growth opportunities
exist through improving and diversifying the merchandise mix, relocating stores,
expanding our K&G brand and adding complementary products and services.
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MERCHANDISING

Our stores offer a broad selection of designer, brand name and private
label men's business attire, including a consistent stock of core items (such as
navy blazers, tuxedos and basic suits). Although basic styles are emphasized,
each season's merchandise reflects current fabric and color trends, and a small
percentage of inventory, accessories in particular, are usually more fashion
oriented. The broad merchandise selection creates increased sales opportunities
by permitting a customer to purchase substantially all of his tailored wardrobe
and accessory requirements, including shoes, at our stores. Within our tailored
clothing, we offer an assortment of styles from a variety of manufacturers and
maintain a broad selection of fabrics, colors and sizes. We believe that the
depth of selection offered provides us with an advantage over most of our
competitors. During fiscal 2002, we also shifted our merchandise mix in order to
increase our offering of opening price point product in our traditional stores.
We believe this shift better aligns our product selection with the everyday low
price value proposition we want to offer our Men's Wearhouse brand customers.

The Company's inventory mix includes "business casual" merchandise designed
to meet demand for such products resulting from more relaxed dress codes in the
workplace. This merchandise consists of tailored and non-tailored clothing
(sport coats, casual slacks, knits and woven sports shirts, sweaters and casual
shoes) that complements the existing product mix and provides opportunity for
enhanced sales without significant inventory risk.

We do not purchase significant quantities of merchandise overruns or
close-outs. We provide recognizable quality merchandise at consistent prices
that assist the customer in identifying the value available at our stores. We
believe that the merchandise at Men's Wearhouse and Moores stores is generally
offered 20% to 30% below traditional department and specialty store regular
prices and that merchandise at K&G stores is generally 30% to 70% below regular
retail prices charged by such stores. A ticket is affixed to each item, which
displays our selling price alongside the price we regard as the regular price of
the item at traditional department and specialty stores.

By targeting men's business attire, a category of men's clothing
characterized by infrequent and more predictable fashion changes, we believe we
are not as exposed to trends typical of more fashion-forward apparel retailers.
This allows us to carry basic merchandise over to the following season and
reduces the need for markdowns; for example, a navy blazer or gray business suit
may be carried over to the next season. Our Men's Wearhouse and Moores stores
have an annual sale that starts around Christmas and runs through the month of
January, during which prices on many items are reduced 20% to 50% off the
everyday low prices. This sale reduces stock at year-end and prepares for the
arrival of the new season's merchandise. In 2002, we had a similar event in
mid-summer; however, the level of advertising for promotion of the summer event
was lower than that for the year-end event.

During 2000, 2001 and 2002, 59.3%, 56.8% and 56.5%, respectively, of our
total net merchandise sales were attributable to tailored clothing (suits, sport
coats and slacks) and 40.7%, 43.2% and 43.5%, respectively, were attributable to
casual attire, sportswear, shoes, shirts, ties, outerwear and other.

In addition to accepting cash, checks or nationally recognized credit
cards, we offer our own private label credit card to Men's Wearhouse customers
and, in May 2002, we introduced a private label credit card to our Moores
customers. We have contracted with a third-party vendor to provide all necessary
servicing and processing and to assume all credit risks associated with our
private label credit card program. We believe that the private label credit card
provides us with an important tool for targeted marketing and presents an
excellent opportunity to communicate with our customers. During 2002, our
customers used the private label credit card for approximately 18% of our sales
at the Men's Wearhouse brand and approximately 8% of our sales at the Moores
brand.

CUSTOMER SERVICE AND MARKETING

The Men's Wearhouse and Moores sales personnel are trained as clothing
consultants to provide customers with assistance and advice on their apparel
needs, including product style, color coordination, fabric and garment fit. For
example, clothing consultants at Men's Wearhouse stores attend an intensive
training

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program at our training facility in Fremont, California, which is further
supplemented with weekly store meetings, periodic merchandise meetings and
frequent interaction with multi-unit managers.

We encourage our clothing consultants to be friendly and knowledgeable and
to promptly greet each customer entering the store. Consultants are encouraged
to offer guidance to the customer at each stage of the decision-making process,
making every effort to earn the customer's confidence and to create a
professional relationship that will continue beyond the initial visit. Clothing
consultants are also encouraged to contact customers after the purchase or
pick-up of tailored clothing to determine whether customers are satisfied with
their purchases and, if necessary, to take corrective action. Store personnel
have full authority to respond to customer complaints and reasonable requests,
including the approval of returns, exchanges, refunds, re-alterations and other
special requests, all of which we believe helps promote customer satisfaction
and loyalty.

K&G stores are designed to allow customers to select and purchase apparel
by themselves. For example, each merchandise category is clearly marked and
organized by size, and suits are specifically tagged "Athletic Fit,"
"Double-Breasted," "Three Button," etc., as a means of further assisting
customers to easily select their styles and sizes. K&G employees assist
customers with merchandise selection, including correct sizing.

Each of our stores provides on-site tailoring services to facilitate timely
alterations at a reasonable cost to customers. Tailored clothing purchased at a
Men's Wearhouse store will be pressed and re-altered (if the alterations were
performed at a Men's Wearhouse store) free of charge for the life of the
garment.

Because management believes that men prefer direct and easy store access,
we attempt to locate our stores in regional strip and specialty retail centers
or in freestanding buildings to enable customers to park near the entrance of
the store.

Our total annual advertising expenditures, which were $69.7 million, $61.2
million and $60.1 million in 2000, 2001 and 2002, respectively, are significant.
The Company advertises principally on television and radio, which we consider
the most effective means of attracting and reaching potential customers, and our
advertising campaign is designed to reinforce our various brands.

PURCHASING AND DISTRIBUTION

We purchase merchandise from approximately 700 vendors. In 2002, no vendor
accounted for 10% or more of purchases. Management does not believe that the
loss of any vendor would significantly impact us. While we have no material
long-term contracts with our vendors, we believe that we have developed an
excellent relationship with our vendors, which is supported by consistent
purchasing practices.

We believe we obtain favorable buying opportunities relative to many of our
competitors. We do not request cooperative advertising support from
manufacturers, which reduces the manufacturers' costs of doing business with us
and enables them to offer us lower prices. Further, we believe we obtain better
discounts by entering into purchase arrangements that provide for limited return
policies, although we always retain the right to return goods that are damaged
upon receipt or determined to be improperly manufactured. Finally, volume
purchasing of specifically planned quantities purchased well in advance of the
season enables more efficient production runs by manufacturers who, in turn,
generally pass some of the cost savings back to us.

We purchase a significant portion of our inventory through a direct
sourcing program. In addition to finished product, we purchase fabric from mills
and contract with certain factories for the assembly of the finished product to
be sold in our U.S. and Canadian stores. Arrangements for fabric and assembly
have been with both domestic and foreign mills and factories. During 2000, 2001
and 2002, product procured through the direct sourcing program represented
approximately 28%, 28% and 27%, respectively, of total inventory purchases for
stores operating in the U.S. We expect that purchases through the direct
sourcing program will represent approximately 30% of total U.S. purchases in
2003. During 2000, 2001 and 2002, our manufacturing operations at Golden Brand
provided 45%, 47% and 43%, respectively, of inventory purchases for Moores
stores and 6%, 5% and 8% during 2000, 2001 and 2002, respectively, of inventory
purchases for Men's Wearhouse stores.

4

To protect against currency exchange risks associated with certain firmly
committed and certain other probable, but not firmly committed, inventory
transactions denominated in a foreign currency (primarily the Euro), we enter
into forward exchange contracts. In addition, many of the purchases from foreign
vendors are financed by letters of credit.

We have entered into license agreements with a limited number of parties
under which we are entitled to use designer labels such as "Gary Player(R)" and
nationally recognized brand labels such as "Botany(R)" and "Botany 500(R)" in
return for royalties paid to the licensor based on the costs of the relevant
product. These license agreements generally limit the use of the individual
label to products of a specific nature (such as men's suits, men's formal wear
or men's shirts). The labels licensed under these agreements will continue to be
used in connection with a portion of the purchases under the direct sourcing
program described above, as well as purchases from other vendors. We monitor the
performance of these licensed labels compared to their cost and may elect to
selectively terminate any license, as provided in the respective agreement. We
have also purchased several trademarks, including "Cricketeer(R)," "Joseph &
Feiss(R)," "Baracuta(R)," and "Pronto Uomo(R)," which are used similarly to our
licensed labels. Because of the continued consolidation in the men's tailored
clothing industry, we may be presented with opportunities to acquire or license
other designer or nationally recognized brand labels.

All merchandise for Men's Wearhouse stores is received into our central
warehouse located in Houston, Texas. Merchandise for a store is picked and then
moved to the appropriate staging area for shipping. In addition to the central
distribution center in Houston, we have space within certain Men's Wearhouse
stores or separate hub warehouse facilities in the majority of our markets,
which function as redistribution facilities for their respective areas. Most
purchased merchandise for Moores and K&G stores is direct shipped by vendors to
the stores.

We lease and operate 29 long-haul tractors and 62 trailers, which, together
with common carriers, are used to transport merchandise from the vendors to our
distribution facilities and from the distribution facilities to Men's Wearhouse
stores within each market. We also lease or own 80 smaller van-like trucks,
which are used to deliver merchandise locally or within a given geographic
region.

COMPETITION

We believe that the unit demand for men's tailored clothing has generally
declined over the past decade. Our primary competitors include specialty men's
clothing stores, traditional department stores, off-price retailers,
manufacturer-owned and independently owned outlet stores and three-day stores.
Over the past several years market conditions have resulted in consolidation of
the industry. We believe that the principal competitive factors in the menswear
market are merchandise assortment, quality, price, garment fit, merchandise
presentation, store location and customer service.

We believe that strong vendor relationships, our direct sourcing program
and our buying volumes and patterns are the principal factors enabling us to
obtain quality merchandise at attractive prices. We believe that our vendors
rely on our predictable payment record and history of honoring promises,
including our promise not to advertise names of labeled and unlabeled designer
merchandise when requested. Certain of our competitors (principally department
stores) may be larger and may have substantially greater financial, marketing
and other resources than we have and therefore may have certain competitive
advantages.

SEASONALITY

Like most retailers, our business is subject to seasonal fluctuations.
Historically, over 30% of our net sales and over 45% of our net earnings have
been generated during the fourth quarter of each year. Because of the
seasonality of our business, results for any quarter are not necessarily
indicative of the results that may be achieved for the full year (see Note 10 of
Notes to Consolidated Financial Statements).

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TRADEMARKS AND SERVICEMARKS

We are the owner in the United States of the trademark and servicemark "The
Men's Wearhouse(R)" and of federal registrations therefor expiring in 2010, 2009
and 2012, respectively, subject to renewal. We have also been granted
registrations for that trademark and servicemark in the 44 states (including
Texas and California) in which we currently do business and have used those
marks. We are also the owner of "MW Men's Wearhouse (and design)(R)" and federal
registrations therefor expiring in 2010 and 2011, respectively, subject to
renewal. Our rights in the "The Men's Wearhouse(R)" and "MW Men's Wearhouse (and
design)(R)" marks are a significant part of our business, as the marks have
become well known through our television and radio advertising campaigns.
Accordingly, we intend to maintain our marks and the related registrations.

We are also the owner in the United States of the servicemarks "The Suit
Warehouse(R)" and "The Suit Warehouse and logo," which are tradenames used by
certain of the stores in Michigan operated by K&G, and "K&G(R)", which is a
tradename used by K&G stores. K&G stores also operate under the tradenames "K&G
Men's Superstore(R)," "K&G Men's Center(R)," "K&G MenSmart(R)" and "K&G
Ladies(R)." We own the registrations for "K&G(R)," "K&G (stylized)(R)," "K&G For
Men. For Women. For Less(R)," "K&G Men's Superstore(R)," "K&G Men's Superstore
(and design)(R)," and "K&G Ladies(R)." The application for the servicemark "K&G
Superstore" is in process. In addition, we own or license other
trademarks/servicemarks used in the business, principally in connection with the
labeling of products purchased through the direct sourcing program.

We own Canadian trademark registrations for the marks "Moores The Suit
People(R)," "Moores Vetements Pour Hommes(R)," "Moores Vetements Pour Hommes
(and design)(R)," "Moores Clothing For Men(R)" and "Moores Clothing For Men (and
design)(R)." Moores stores operate under the tradenames "Moores Clothing For
Men" and "Moores Vetements Pour Hommes."

EMPLOYEES

At February 1, 2003, we had approximately 11,500 employees, of whom
approximately 9,000 were full-time and approximately 2,500 were part-time
employees. Seasonality affects the number of part-time employees as well as the
number of hours worked by full-time and part-time personnel. Approximately 1,032
of our employees at Golden Brand belong to the Union of Needletrades, Industrial
and Textile Employees. Golden Brand is part of a collective bargaining unit, of
which it is the largest company. The current union contract expires in November
2005.

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ITEM 2. PROPERTIES

As of February 1, 2003, we operated 575 stores in 44 states and the
District of Columbia and 114 stores in 10 Canadian provinces. The following
table sets forth the location, by state or province, of these stores:

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Men's Wearhouse and Moores stores vary in size from approximately 2,950 to
15,100 total square feet (average square footage at February 1, 2003 was 5,562
square feet with 66% of stores having between 4,500 and 6,500 square feet).
Men's Wearhouse and Moores stores are primarily located in middle and upper-
middle income regional strip and specialty retail shopping centers. We believe
our customers generally prefer to limit the amount of time they spend shopping
for menswear and seek easily accessible store sites.

Men's Wearhouse and Moores stores are designed to further our strategy of
facilitating sales while making the shopping experience pleasurable. We attempt
to create a specialty store atmosphere through effective merchandise
presentation and sizing, attractive in-store signs and efficient checkout
procedures. Most of these stores have similar floor plans and merchandise
presentation to facilitate the shopping experience and sales process. Designer,
brand name and private label garments are intermixed, and emphasis is placed on
the fit of the garment rather than on a particular label or manufacturer. Each
store is staffed with clothing consultants and sales associates and has a
tailoring facility with at least one tailor.

K&G stores vary in size from approximately 5,400 to 50,000 total square
feet (average square footage at February 1, 2003 was 21,424 square feet with 41%
of stores having between 15,000 and 25,000 square feet). K&G stores are
"destination" stores located primarily in low-cost warehouses and second
generation strip shopping centers that are easily accessible from major highways
and thoroughfares. K&G has created a 25,000 square foot prototype men's and
ladies' superstore with fitting rooms and convenient check-out, customer service
and tailoring areas. K&G stores are organized to convey the impression of a
dominant assortment of first-quality merchandise and to project a no-frills,
value-oriented warehouse atmosphere. Each element of store layout and
merchandise presentation is designed to reinforce K&G's strategy of providing a
large selection and assortment in each category. We seek to make K&G stores
"customer friendly" by utilizing store signage and grouping merchandise by
categories and sizes, with brand name and private label merchandise intermixed.
We also seek to instill a sense of urgency for the customer to purchase by
opening K&G stores for business on Thursdays (as of April 2003), Fridays,
Saturdays and Sundays only, except for a limited number of Monday holidays and
an expanded schedule for the holiday season when stores are open every day. Each
store is typically staffed with a manager, assistant manager and other employees
who serve as customer service and sales personnel and cashiers. Each store also
has a tailoring facility with at least one tailor.

We lease our stores on terms generally from five to ten years with renewal
options at higher fixed rates in most cases. Leases typically provide for
percentage rent over sales break points. Additionally, most leases provide for a
base rent as well as "triple net charges", including but not limited to common
area and maintenance expenses, property taxes, utilities, center promotions and
insurance. In certain markets, we lease between 1,000 and 3,000 additional
square feet in either a Men's Wearhouse store or a separate hub warehouse unit
to be utilized as a redistribution facility in that geographic area.

We own a 240,000 square foot facility situated on approximately seven acres
of land in Houston, Texas which serves as our principal office, warehouse and
distribution facility. Approximately 65,000 square feet of this facility is used
as office space for our financial, information technology and merchandising
departments with the remaining 175,000 square feet serving as a warehouse and
distribution center. We also own a 150,000 square foot facility, situated on an
adjacent six acres, comprised of approximately 9,000 square feet of office space
and 141,000 square feet serving as a warehouse and distribution center. During
1999, we purchased a 46-acre site in Houston on which we have developed
additional new distribution facilities. The first phase of development, an
approximately 385,000 square foot distribution center to support our tuxedo
rental program and our flat-packed merchandise, became operational during the
first and second quarters of 2001. In 2003, we plan to develop an additional
200,000 square feet as an expansion of our existing tuxedo operations.

Our executive offices in Fremont, California are housed in a 35,500 square
foot facility that we own. This facility serves as an office and training
facility. We also lease 17,417 square feet of additional office space in four
other locations and 27,000 square feet of warehouse space in Richmond,
California.

K&G leases a 100,000 square foot facility in Atlanta, Georgia which serves
as an office, distribution and store facility. Approximately 47,000 square feet
of this facility is used as office space for financial, information

8

technology and merchandising personnel, 11,000 square feet is used as a
distribution center for store fixtures and supplies and the remaining 42,000
square feet is used as a store.

Moores leases a 37,700 square foot facility in Toronto, Ontario, comprised
of approximately 17,900 square feet of office space and 19,800 square feet used
as a warehouse and distribution center. Moores also leases a 94,700 square foot
warehouse facility in Montreal, Quebec, and a 230,000 square foot facility in
Montreal, Quebec comprised of approximately 13,000 square feet of office space,
37,600 square feet of warehouse space and 179,400 square feet of manufacturing
space.

ITEM 3. LEGAL PROCEEDINGS

On May 11, 2001, a lawsuit was filed against the Company in the Superior
Court of California for the County of San Diego, Cause No. GIC 767223 (the "San
Diego County Suit"). The San Diego County Suit, which was brought as a purported
class action, alleges several causes of action, each based on the factual
allegation that we advertised and sold men's slacks at a marked price that was
exclusive of a hemming fee for the pants. The San Diego County Suit seeks: (i)
permanent and preliminary injunctions against advertising slacks at prices which
do not include hemming; (ii) restitution of all funds allegedly acquired by
means of any act or practice declared by the Court to be unlawful or fraudulent
or to constitute unfair competition under certain California statutes, (iii)
prejudgment interest; (iv) compensatory and punitive damages; (v) attorney's
fees; and (vi) costs of suit. We believe that the San Diego County Suit is
without merit and the allegations are contrary to customary and well recognized
and accepted practices in the sale of men's tailored clothing. The complaint in
the San Diego County Suit was subsequently amended to add similar causes of
action and requests for relief based upon allegations that our alleged "claims
that [it] sell[s] the same garments as department stores at 20% to 30% less" are
false and misleading. We believe that such added causes of action are also
without merit. The court ruled against the plaintiff's motion for class
certification, declining to certify a class. On October 17, 2002, the court
granted summary adjudication in favor of the Company on the plaintiff's false
advertising claim on behalf of the general public relating to hemming fees, and
also reaffirmed its earlier ruling denying class certification. The court found
there were triable issues of fact, and therefore denied summary adjudication on
the remaining claims. The court has tentatively set a trial date for May 19,
2003. The Company intends to vigorously defend the San Diego County Suit.

On April 18, 2003, a lawsuit was filed against the Company in the Superior
Court of California for the County of Orange, Case No. 03CC00132 (the "Orange
County Suit"). On April 21, 2003, a lawsuit was filed against K&G Men's Center,
Inc. and K&G Men's Company Inc. (collectively, "K&G"), wholly owned subsidiaries
of the Company, in the Los Angeles Superior Court of California, Case No.
BC294361 (the "Los Angeles County Suit"; the Los Angeles County Suit and the
Orange County Suit shall be referred to jointly as the "Suits"). The Suits,
which were both brought as purported class actions, allege several causes of
action, each based on the factual allegation that in the State of California the
Company and K&G misclassified its managers and assistant managers as exempt from
the application of certain California labor statutes. Because of this
misclassification, the Suits allege that the Company and K&G failed to pay
overtime compensation and provide the required rest periods to such employees.
The Suits seek, among other things, declaratory and injunctive relief along with
an accounting as to alleged wages, premium pay, penalties, interest and
restitution allegedly due the class defendants. We believe that our managers and
assistant managers were properly classified as exempt under such statutes and,
therefore, properly compensated. The Company believes that the Suits are without
merit and intends to vigorously defend them.

In addition, we are involved in various routine legal proceedings,
including ongoing litigation, incidental to the conduct of our business.
Management believes that none of these matters will have a material adverse
effect on our financial condition or results of operations.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

No matters were submitted to a vote of security holders during the fourth
quarter of the fiscal year ended February 1, 2003.

9

PART II

ITEM 5. MARKET FOR THE COMPANY'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

Our common stock is traded on the New York Stock Exchange under the symbol
"MW." The following table sets forth, on a per share basis for the periods
indicated, the high and low sale prices per share for our common stock as
reported by the New York Stock Exchange:

On April 25, 2003, there were approximately 1,450 holders of record and
approximately 5,014 beneficial holders of our common stock.

We have not paid cash dividends on our common stock and for the foreseeable
future we intend to retain all of our earnings for the future operation and
expansion of our business. Our credit agreement prohibits the payment of cash
dividends on our common stock (see Note 4 of Notes to Consolidated Financial
Statements).

10

ITEM 6. SELECTED FINANCIAL DATA

The following selected statement of earnings and balance sheet information
for the fiscal years indicated has been derived from The Men's Wearhouse, Inc.
(the "Company") audited consolidated financial statements. The Selected
Financial Data should be read in conjunction with "Management's Discussion and
Analysis of Financial Condition and Results of Operations" and the Consolidated
Financial Statements and notes thereto. References herein to years are to the
Company's 52-week or 53-week fiscal year, which ends on the Saturday nearest
January 31 in the following calendar year. For example, references to "2002"
mean the fiscal year ended February 1, 2003. All fiscal years for which
financial information is included herein had 52 weeks, except 2000 which had 53
weeks.

Financial and operating data for all periods presented reflect the
retroactive effect of the February 1999 combination with Moores Retail Group
Inc. ("Moores") and the June 1999 combination with K&G Men's Center, Inc.
("K&G"), both accounted for as a pooling of interests (see Note 2 of Notes to
Consolidated Financial Statements).

- ---------------

(1) Adjusted to give effect to a 50% stock dividend effected on June 19, 1998.

(2) Comparable store sales data is calculated by excluding the net sales of a
store for any month of one period if the store was not open throughout the
same month of the prior period. Fiscal year 2000 is calculated on a 52-week
basis.

(3) Average square footage -- all stores is calculated by dividing the total
square footage for all stores open at the end of the period by the number of
stores open at the end of such period.

(4) Average sales per square foot of selling space is calculated by dividing
total selling square footage for all stores open the entire year into total
sales for those stores.

(5) In 1999, in conjunction with the Moores and K&G combinations as discussed in
Note 2 of Notes to Consolidated Financial Statements, we recorded
transaction costs of $7.7 million, duplicative store closing costs of $6.1
million and litigation costs of $0.9 million. These charges in total reduced
operating income by $14.7 million and earnings before extraordinary item by
$11.2 million; basic and diluted earnings per share of common stock before
extraordinary item were reduced by $0.27 and $0.26, respectively. The
transaction costs were composed primarily of investment banking fees,
professional fees and contract termination payments, while the duplicative
store closing costs consisted primarily of lease termination payments and
the write-off of fixed assets associated with the closing of duplicate store
sites in existing markets. The litigation charge resulted from the
settlement of a lawsuit filed by a former K&G employee related to his
employment relationship with K&G. In addition, we recorded an extraordinary
charge of $2.9 million, net of a $1.4 million tax benefit, related to the
write-off of deferred financing costs and prepayment penalties for the
refinancing of approximately US$57 million of Moores' indebtedness.

(6) In August 1998, the Company gave notice to the holders of its outstanding
5 1/4% Convertible Subordinated Notes (the "Notes") that the Company would
redeem the Notes on September 14, 1998. As a result, $36.8 million principal
amount of the Notes was converted into 1.6 million shares of the Company's
common stock and $20.7 million principal amount was redeemed for an
aggregate of $21.5 million. An extraordinary charge of $0.7 million, net of
tax benefit of $0.5 million, related to the early retirement of the Notes in
fiscal 1998 was recognized.

12

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

GENERAL

The Men's Wearhouse opened its first store in Houston, Texas in August
1973. The Company combined with Moores Retail Group Inc. ("Moores") in February
1999 and with K&G Men's Center, Inc. ("K&G") in June 1999, with both
combinations accounted for as a pooling of interests (see Note 2 of Notes to
Consolidated Financial Statements). At February 1, 2003, we operated 575 stores
in the United States and 114 stores in Canada. We opened 39 stores in 2000, 32
stores in 2001 and 16 stores in 2002; in addition, we acquired one store in
2000. Expansion is generally continued within a market as long as management
believes it will provide profitable incremental sales volume. Historically, this
growth has resulted in significant increases in net sales and has also
contributed to increased net earnings. However, in 2001, we experienced a
decrease in net sales and net earnings primarily as a result of the declining US
economy and the effects of the events of September 11, 2001. The continued
decline of the US and Canadian economies throughout fiscal year 2002 continued
to impact net sales and net earnings in comparison to pre-2001 levels (see
"Results of Operations" discussion herein).

Like most retailers, our business is subject to seasonal fluctuations.
Historically, more than 30% of our net sales and more than 45% of our net
earnings have been generated during the fourth quarter of each year. Because of
the seasonality of our business, results for any quarter are not necessarily
indicative of the results that may be achieved for the full year.

We intend to continue our expansion in new and existing markets. We plan to
open approximately 10 new Men's Wearhouse stores and seven new K&G stores in
2003, to close two Men's Wearhouse stores and six K&G stores and to expand
and/or relocate approximately 19 existing Men's Wearhouse stores and four
existing K&G stores. The average cost (excluding telecommunications and
point-of-sale equipment and inventory) of opening a new store is expected to be
approximately $0.3 million in 2003.

We have closed 13 stores in the three years ended February 1, 2003.
Generally, in determining whether to close a store, we consider the store's
historical and projected performance and the continued desirability of the
store's location. In determining store contribution, the Company considers net
sales, cost of sales and other direct store costs, but excludes buying costs,
corporate overhead, depreciation and amortization, financing costs and
advertising. Store performance is continually monitored and, occasionally, as
regions and shopping areas change, management may determine that it is in our
best interest to close or relocate a store. In 2000, three stores were closed
due to substandard performance. In 2001, three stores were closed due to
substandard performance or lease expiration. In 2002, five stores were closed
due to substandard performance or lease expiration and two stores were closed
when their operations were combined with other existing area stores.

CRITICAL ACCOUNTING POLICIES

The preparation of our consolidated financial statements requires the
appropriate application of accounting policies in accordance with generally
accepted accounting principles. In many instances, this also requires management
to make estimates and assumptions about future events that affect the amounts
and disclosures included in our financial statements. We base our estimates on
historical experience and various assumptions that we believe are reasonable
under the circumstances. However, since future events and conditions and their
effects cannot be determined with certainty, actual results will differ from our
estimates, and such differences could be material to our financial statements.

Our accounting policies are described in Note 1 of Notes to Consolidated
Financial Statements. We consistently apply these policies and periodically
evaluate the reasonableness of our estimates in light of actual events.
Historically, we have found our accounting policies to be appropriate and our
estimates and assumptions reasonable. We believe our critical accounting
policies and our most significant estimates are those that relate to inventories
and long-lived assets, including goodwill, and our estimated liabilities for the
self-insured portions of our workers' compensation and employee health benefit
costs.

13

Our inventory is carried at the lower of cost or market. Cost is determined
on the first-in, first-out method for approximately 80% of our inventory and on
the retail inventory method for the remaining 20%. Our inventory cost also
includes estimated procurement and distribution costs (warehousing, freight,
hangers and merchandising costs) associated with the inventory, with the balance
of such costs included in cost of sales. We make assumptions, based primarily on
historical experience, as to items in our inventory that may be damaged,
obsolete or salable only at marked down prices and reduce the cost of inventory
to reflect the market value of these items. If actual damages, obsolescence or
market demand is significantly different from our estimates, additional
inventory write-downs could be required. In addition, procurement and
distribution costs are allocated to inventory based on the ratio of annual
product purchases to average inventory cost. If this ratio were to change
significantly, it could materially affect the amount of procurement and
distribution costs included in cost of sales.

We make judgments about the carrying value of long-lived assets, such as
property and equipment and amortizable intangibles, and the recoverability of
goodwill whenever events or changes in circumstances indicate that an
other-than-temporary impairment in the remaining value of the assets recorded on
our balance sheet may exist. We test for impairment annually or more frequently
if circumstances dictate. To estimate the fair value of long-lived assets,
including goodwill, we make various assumptions about the future prospects for
the brand that the asset relates to and typically estimate future cash flows to
be generated by these brands. Based on these assumptions and estimates, we
determine whether we need to take an impairment charge to reduce the value of
the asset stated on our balance sheet to reflect its estimated fair value.
Assumptions and estimates about future values and remaining useful lives are
complex and often subjective. They can be affected by a variety of factors,
including external factors such as industry and economic trends, and internal
factors such as changes in our business strategy and our internal forecasts.
Although we believe the assumptions and estimates we have made in the past have
been reasonable and appropriate, different assumptions and estimates could
materially impact our reported financial results. We recorded no impairment
charge as a result of our testing performed during 2002.

We self-insure portions of our workers' compensation and employee medical
costs. We estimate our liability for future payments under these programs based
on historical experience and various assumptions as to participating employees,
health care costs, number of claims and other factors, including industry trends
and information provided to us by our insurance broker. We also use actuarial
estimates with respect to workers' compensation. If the number of claims or the
costs associated with those claims were to increase significantly over our
estimates, additional charges to earnings could be necessary to cover required
payments.

RESULTS OF OPERATIONS

The following table sets forth the Company's results of operations
expressed as a percentage of net sales for the periods indicated:

14

2002 COMPARED WITH 2001

The following table presents a breakdown of 2001 and 2002 net sales of the
Company by stores open in each of these periods (in millions):

The Company's net sales increased $21.8 million, or 1.7%, to $1.295 billion
for 2002 due primarily to increased sales in US stores opened in 2001 and 2002,
offset partially by decreased sales from stores opened prior to fiscal 2001.
Comparable store sales (which are calculated by excluding the net sales of a
store for any month of one period if the store was not open throughout the same
month of the prior period) for 2002 decreased 3.1% in the US and 2.1% in Canada
from 2001. The decrease in comparable sales for the U.S. and Canadian stores was
due mainly to continued weakness in the U.S. and Canadian economies. Sales of
men's apparel is particularly affected since buying patterns for men are
considered to be more discretionary than those in other apparel areas.

Gross margin increased $3.2 million, or 0.7%, to $454.3 million in 2002. As
a percentage of sales, gross margin decreased from 35.4% in 2001 to 35.1% in
2002. This decrease in gross margin percentage predominately resulted from an
increase in occupancy cost (which is relatively constant on a per store basis)
as a percentage of sales and higher markdowns at the Men's Wearhouse brand
associated with a shift to merchandise with lower opening price points. This was
offset in part by our higher margin tuxedo rental revenues increasing from 0.8%
of total revenues in fiscal 2001 to 2.5% of total revenues in fiscal 2002.

Selling, general and administrative ("SG&A") expenses, as a percentage of
sales, were 29.7% in 2002 compared to 29.6% in 2001, with SG&A expenditures
increasing by $7.7 million or 2.0% to $385.0 million. On an absolute dollar
basis, advertising decreased by $1.1 million, store salaries increased by $10.4
million and other SG&A decreased by $1.6 million. As a percentage of sales,
advertising expense decreased from 4.8% to 4.6%, store salaries increased from
11.4% to 12.1% and other SG&A expenses decreased from 13.4% to 13.0%. The
decrease in advertising was due to planned reductions in media spending. The
increase in store salaries was the result of higher sales commission rates in
2002 for promotional and other merchandise sales categories. These commission
rates were put in place to help drive the shift to lower opening price points
for merchandise offerings at the Men's Wearhouse brand. Other SG&A expenses
decreased due to our focus on reducing corporate overhead.

Interest expense, net of interest income, decreased from $2.9 million in
2001 to $1.3 million in 2002. Weighted average borrowings outstanding decreased
$25.5 million from the prior year to $39.8 million in 2002, and the weighted
average interest rate on outstanding indebtedness decreased from 5.4% to 4.9%.
The decrease in the weighted average borrowings resulted primarily from
decreased short-term borrowings under our credit facilities. The decrease in the
weighted average interest rate was due primarily to decreases during 2002 in the
LIBOR rate. Interest expense was offset by interest income from the investment
of excess cash of $0.8 million in 2001 and $1.0 million in 2002. See "Liquidity
and Capital Resources" discussion herein.

Our effective income tax rate for the year ended February 1, 2003 was 37.8%
compared to 39.0% for the prior year. The effective tax rate was higher than the
statutory federal rate of 35% primarily due to the effect of state income taxes.

These factors resulted in 2002 net earnings of $42.4 million or 3.3% of net
sales, compared with 2001 net earnings of $43.3 million or 3.4% of net sales.

15

2001 COMPARED WITH 2000

The following table presents a breakdown of 2000 and 2001 net sales of the
Company by stores open in each of these periods (in millions):

The Company's net sales decreased $60.3 million, or 4.5%, to $1.273 billion
for 2001 due primarily to decreased sales in US stores open prior to fiscal year
2000, offset by increased sales from stores opened in 2000 and 2001. Comparable
store sales for 2001 decreased 10.2% in the US and increased 4.2% in Canada from
2000. The decrease in comparable sales for the US stores was due mainly to the
declining US economy. Sales of men's tailored apparel are particularly affected
since buying patterns for men are considered to be more discretionary than those
in other apparel areas. The negative effect of the terrorist events of September
11, 2001 on retail and numerous other business sectors also contributed to the
decline.

Gross margin decreased $63.6 million, or 12.3%, to $451.1 million in 2001.
As a percentage of sales, gross margin decreased from 38.6% in 2000 to 35.4% in
2001. This decrease in gross margin predominately resulted from an increase in
occupancy cost (which is relatively constant on a per store basis) as a
percentage of sales and a larger percentage of the sales mix being contributed
by our lower margin K&G brand.

SG&A expenses, as a percentage of sales, were 29.6% in 2001 compared to
28.0% in 2000, with SG&A expenditures increasing by $3.8 million or 1.0% to
$377.3 million. On an absolute dollar basis, the principal components of SG&A
expenses increased primarily due to our growth in number of stores and increased
infrastructure support costs. As a percentage of sales, advertising expense
decreased from 5.2% to 4.8%, store salaries increased from 11.1% to 11.4% and
other SG&A expenses increased from 11.7% to 13.4%.

Interest expense, net of interest income, increased from $0.8 million in
2000 to $2.9 million in 2001. Weighted average borrowings outstanding increased
$15.4 million from the prior year to $65.3 million in 2001, and the weighted
average interest rate on outstanding indebtedness decreased from 7.1% to 5.4%.
The increase in the weighted average borrowings resulted primarily from
increased short-term borrowings under our credit facilities. The decrease in the
weighted average interest rate was due primarily to decreases during 2001 in the
LIBOR rate. Interest expense was offset by interest income from the investment
of excess cash of $2.8 million in 2000 and $0.8 million in 2001. See "Liquidity
and Capital Resources" discussion herein.

Our effective income tax rate for the year ended February 2, 2002 was 39.0%
compared to 39.7% for the prior year. The effective tax rate was higher than the
statutory federal rate of 35% primarily due to the effect of state income taxes.

These factors resulted in 2001 net earnings of $43.3 million or 3.4% of net
sales, compared with 2000 net earnings of $84.7 million or 6.3% of net sales.

LIQUIDITY AND CAPITAL RESOURCES

In January 2003, we replaced our existing $125.0 million revolving credit
facility which was scheduled to mature in February 2004 with a new revolving
credit agreement with a group of banks (the "Credit Agreement") that provides
for borrowing of up to $100.0 million through February 4, 2006. Advances under
the new Credit Agreement bear interest at a rate per annum equal to, at our
option, the agent's prime rate or the reserve adjusted LIBOR rate plus a varying
interest rate margin. The Credit Agreement also provides for fees applicable to
unused commitments. The terms and conditions of the new Credit Agreement are

16

substantially the same as those of the replaced facility. As of February 2, 2002
and February 1, 2003, there was no indebtedness outstanding under the respective
credit facilities.

The new Credit Agreement contains various restrictive and financial
covenants, including the requirement to maintain a minimum level of net worth
and certain financial ratios. The Credit Agreement also prohibits payment of
cash dividends on our common stock. We are in compliance with the covenants in
the Credit Agreement.

In addition, in January 2003, we entered into a new Canadian credit
facility which is a term credit agreement under which we borrowed Can$62.0
million (US$40.7 million). The term credit borrowing is payable in quarterly
installments of Can$0.8 million (US$0.5 million) beginning May 2003, with the
remaining unpaid principal payable on February 4, 2008. Borrowings under the new
term credit agreement were used to repay approximately Can$60.9 million (US$40.0
million) in outstanding indebtedness of Moores under the previous term credit
agreement and to fund financing requirements of Moores. The effective interest
rate for the term credit borrowing was 2.8% and 4.3% at February 2, 2002 and
February 1, 2003, respectively. Covenants and interest rates for the term credit
agreement are substantially similar to those contained in our new Credit
Agreement. As of February 2, 2002 and February 1, 2003, there was US$40.1
million and US$40.7 million outstanding under these term credit agreements,
respectively.

Our primary sources of working capital are cash flow from operations and
borrowings under the Credit Agreement. We had working capital of $316.2 million,
$301.9 million and $325.3 million at the end of 2000, 2001 and 2002,
respectively. Historically, our working capital has been at its lowest level in
January and February, and has increased through November as inventory buildup is
financed with both vendor payables and credit facility borrowings in preparation
for the fourth quarter selling season.

Our operating activities provided net cash of $94.7 million and $52.3
million in 2000 and 2001, respectively, as cash provided by net earnings,
adjusted for non-cash charges and increases in payables, was more than offset by
increases in inventories and other assets and, in 2001, a decrease in income
taxes payable. Inventories increased $36.6 million in 2000 and $22.8 million in
2001 due to seasonal inventory buildup, the addition of inventory for new stores
and stores expected to be opened in the following quarter and the purchase of
fabric used in the direct sourcing of inventory. Other assets increased
primarily due to increased investment in tuxedo rental merchandise, while income
taxes payable decreased in 2001 mainly due to reduced earnings. During 2002, our
operating activities provided net cash of $113.0 million due mainly to net
earnings, adjusted for non-cash charges, a decrease in inventories and an
increase in payables, offset partially by an increase in other assets and a
decrease in income taxes payable. Our 4.5% decrease in net sales in fiscal 2001,
combined with our inventory levels at the end of fiscal 2001 and our modest
increase in net sales in fiscal 2002, have resulted in lower planned inventory
purchases. We also modified our inventory mix at our Men's Wearhouse stores to
increase our offering of opening price point product. As a result, the inventory
buildup through fiscal 2002 was not as significant as that typically experienced
during prior years and our balance of inventory at year end was less than our
fiscal 2001 year end balance. Our payables, however, increased as our buying
patterns normalized in the last quarter of 2002. Other assets increased
primarily due to increased investment in tuxedo rental merchandise, while income
taxes payable decreased mainly due to reduced earnings and a lower effective tax
rate associated with the mix of federal and state earnings.

Our investing activities used net cash of $83.4 million, $66.4 million and
$41.2 million in 2000, 2001 and 2002, respectively, due mainly to capital
expenditures of $79.4 million, $64.8 million and $45.4 million in 2000, 2001 and
2002, respectively. Our capital expenditures relate to costs incurred for stores
opened, remodeled or relocated during the year or under construction at the end
of the year and infrastructure technology investments. However, during 2002,
cash used for capital expenditures was partially offset by net proceeds received
from the sale of substantially all of the assets of Chelsea Market Systems,
L.L.C. ("Chelsea") to an unrelated company regularly engaged in the development
and licensing of software to the retail industry. As a result of the sale of
Chelsea, and after giving effect to the settlement of a related lawsuit, the
Company received net proceeds of $6.8 million. Approximately $4.4 million of
this amount will be recognized as a pretax operating gain by the Company,
pending the lapse of certain indemnification provisions related to the assets
sold, in the first quarter of 2003 (see "Other Matters" herein).

17

The following table details our capital expenditures (in millions):

Property additions relating to new stores include stores in various stages
of completion at the end of the fiscal year (two stores at the end of 2000,
three stores at the end of 2001 and no stores at the end of 2002). Our
expenditures for the relocation and remodeling of existing stores continue to be
substantial as we have opened fewer new stores.

We used net cash in financing activities of $4.7 million in 2000, $30.7
million in 2001 and $26.6 million in 2002 mainly for net payments of long-term
debt and purchases of treasury stock. As previously noted, we entered into a new
Canadian credit facility which is a term credit agreement under which we
borrowed Can$62 million (US$40.7 million) in January 2003. Borrowings under the
term credit agreement were used to repay approximately Can$60.9 million (US$40.0
million) in outstanding indebtedness of Moores under the previous term credit
agreement. In January 2000, the Board of Directors authorized the repurchase of
up to one million shares in the open market or in private transactions,
dependent on the market price and other considerations. On January 31, 2001, the
Board of Directors authorized an expansion of the stock repurchase program for
up to an additional two million shares of our common stock. During 2000, 2001
and 2002, we repurchased 335,000, 1,185,000 and 1,480,000 shares of our common
stock under this program at a cost of $7.9 million, $30.4 million and $28.1
million, respectively. In November 2002, the Board of Directors authorized a new
program for the repurchase of up to $25.0 million of Company stock in the open
market or in private transactions. As of February 24, 2003, no shares had yet
been repurchased under this program.

In connection with our share repurchase programs, we have from time to time
issued put option contracts and received premiums for doing so, with the
premiums being added to our capital in excess of par and effectively reducing
the cost of our share repurchases. Under these contracts, the contract
counterparties have the option to require us to purchase a specific number of
shares of our common stock at specific strike prices per share on specific
dates. During 2000, we issued three separate contracts for a total of 650,000
shares and received premiums of $0.9 million. However, the contracts expired
unexercised and all of the 335,000 shares we repurchased for $7.9 million in
2000 were acquired in open market transactions. During 2002, we repurchased
980,000 shares of our stock for $16.7 million in the open market and 500,000
shares for $11.4 million through settlement of an option contract. We received a
premium of $0.6 million for issuing this contract. The contract counterparty had
the option to exercise this contract at a strike price of $22.76 per share on
December 17, 2002, but contract completion was required earlier if the market
price of our common stock fell below a trigger price of $12.64 per share. During
the third quarter of 2002, the market price of our common stock fell below the
trigger price and we settled the contract.

18

Our primary cash requirements are to finance working capital increases as
well as to fund capital expenditure requirements which are anticipated to be
approximately $50 million for 2003. This amount includes the anticipated costs
of opening approximately 10 new Men's Wearhouse stores and seven new K&G stores
in 2003 at an expected average cost per store of approximately $0.3 million
(excluding telecommunications and point-of-sale equipment and inventory). It
also includes approximately $10.0 million for expansion of our tuxedo
distribution facility and additional material handling equipment. The balance of
the capital expenditures for 2003 will be used for telecommunications,
point-of-sale and other computer equipment and systems, store relocations,
remodeling and expansion and infrastructure expansion to support our tuxedo
rental business. The Company anticipates that each of the 10 new Men's Wearhouse
stores and each of the seven new K&G stores will require, on average, an initial
inventory costing approximately $0.4 million and $1.2 million, respectively
(subject to the same seasonal patterns affecting inventory at all stores), which
will be funded by our revolving credit facility, trade credit and cash from
operations. The actual amount of future capital expenditures and inventory
purchases will depend in part on the number of new stores opened and the terms
on which new stores are leased. Additionally, the continuing consolidation of
the men's tailored clothing industry and recent financial difficulties of
significant menswear retailers may present us with opportunities to acquire
retail chains significantly larger than our past acquisitions. Any such
acquisitions may be undertaken as an alternative to opening new stores. We may
use cash on hand, together with cash flow from operations, borrowings under our
revolving credit facility and issuances of equity securities, to take advantage
of significant acquisition opportunities.

We anticipate that our existing cash and cash flow from operations,
supplemented by borrowings under our various credit agreements, will be
sufficient to fund planned store openings, other capital expenditures and
operating cash requirements for at least the next 12 months.

In connection with our direct sourcing program, we may enter into purchase
commitments that are denominated in a foreign currency (primarily the Euro). We
generally enter into forward exchange contracts to reduce the risk of currency
fluctuations related to such commitments. As these forward exchange contracts
are with two financial institutions, we are exposed to credit risk in the event
of nonperformance by these parties. However, due to the creditworthiness of
these major financial institutions, full performance is anticipated. We may also
be exposed to market risk as a result of changes in foreign exchange rates. This
market risk should be substantially offset by changes in the valuation of the
underlying transactions.

OTHER MATTERS

In January 2000, we formed a joint venture company ("Chelsea") for the
purpose of developing a new point-of-sale software system for the Company and
after successful implementation, exploring the possibility of marketing the
system to third parties. Under the terms of the agreement forming Chelsea, we
owned 50% of Chelsea and a director and officer owned 50% with the understanding
that the officer would assign, either directly or indirectly, some of his
interest in Chelsea to other persons involved in the project. The point-of-sale
system was developed and successfully deployed by the Company during 2000 and
2001. From January 2000 though March 2002, we funded and recognized as expense
all of the operating costs of Chelsea, which aggregated $4.5 million. On March
31, 2002, Chelsea sold substantially all of its assets to an unrelated company
regularly engaged in the development and licensing of software to the retail
industry. As a result of the sale by Chelsea, and after giving effect to the
settlement of the lawsuit, the Company received a net amount of $6.8 million.
Approximately $4.4 million of this amount will be recognized as a pretax
operating gain by the Company, pending the lapse of certain indemnification
provisions related to the assets sold, in the first quarter of 2003.

IMPACT OF NEW ACCOUNTING PRONOUNCEMENTS

In June 2001, the FASB issued Statement No. 143, "Accounting for Asset
Retirement Obligations" ("SFAS 143"). SFAS 143 addresses the accounting and
reporting for obligations associated with the retirement of tangible long-lived
assets and the associated retirement costs and is effective for fiscal years
beginning after June 15, 2002. The adoption of this statement will not have a
material impact on our financial position or results of operations.
19

In April 2002, the FASB issued Statement No. 145, "Rescission of FASB
Statements No. 4, 44, and 64, Amendment of FASB Statement No. 13, and Technical
Corrections" ("SFAS 145"). SFAS 145 rescinds FASB Statement No. 4, "Reporting
Gains and Losses from Extinguishment of Debt," FASB Statement No. 44,
"Accounting for Intangible Assets of Motor Carriers" and FASB Statement No. 64,
"Extinguishments of Debt Made to Satisfy Sinking-Fund Requirements". In
addition, SFAS 145 amends FASB Statement No. 13, "Accounting for Leases," to
eliminate an inconsistency between the required accounting for sale-leaseback
transactions and the required accounting for certain lease modifications that
have economic effects that are similar to sale-leaseback transactions. This
statement also makes non-substantive technical corrections to existing
pronouncements. SFAS 145 is effective for fiscal years beginning after May 15,
2002. The adoption of this statement is not expected to have a material impact
on our financial position or results of operations.

In January 2003, the Financial Accounting Standards Board issued Financial
Interpretation No. 46 ("FIN 46"), "Consolidation of Variable Interest Entities."
FIN 46 requires that if an entity has a controlling financial interest in a
variable interest entity, the assets, liabilities and results of activities of
the variable interest entity should be included in the consolidated financial
statements of the entity. FIN 46 requires that its provisions are effective
immediately for all arrangements entered into after January 31, 2003. We do not
have any variable interest entities created after January 31, 2003. For any
arrangements entered into prior to January 31, 2003, the FIN 46 provisions are
required to be adopted at the beginning of the first interim or annual period
beginning after June 15, 2003. The adoption of FIN 46 is not expected to have a
material impact on our financial position or results of operations.

INFLATION

The impact of inflation on the Company has been minimal.

FORWARD-LOOKING STATEMENTS

Certain statements made herein and in other public filings and releases by
the Company contain "forward-looking" information (as defined in the Private
Securities Litigation Reform Act of 1995) that involve risk and uncertainty.
These forward-looking statements may include, but are not limited to, future
capital expenditures, acquisitions (including the amount and nature thereof),
future sales, earnings, margins, costs, number and costs of store openings,
demand for clothing, market trends in the retail clothing business, currency
fluctuations, inflation and various economic and business trends.
Forward-looking statements may be made by management orally or in writing,
including, but not limited to, this Management's Discussion and Analysis of
Financial Condition and Results of Operations section and other sections of our
filings with the Securities and Exchange Commission under the Securities
Exchange Act of 1934 and the Securities Act of 1933.

Actual results and trends in the future may differ materially depending on
a variety of factors including, but not limited to, domestic and international
economic activity and inflation, our successful execution of internal operating
plans and new store and new market expansion plans, performance issues with key
suppliers, severe weather, foreign currency fluctuations, government export and
import policies and legal proceedings. Future results will also be dependent
upon our ability to continue to identify and complete successful expansions and
penetrations into existing and new markets and our ability to integrate such
expansions with our existing operations.

20

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are subject to exposure from fluctuations in U.S. dollar/Euro exchange
rates. As further described in Note 9 of Notes to Consolidated Financial
Statements and "Item 7, Management's Discussion and Analysis of Financial
Information and Results of Operations -- Liquidity and Capital Resources", we
utilize foreign currency forward exchange contracts to limit exposure to changes
in currency exchange rates. At February 1, 2003, we had four contracts maturing
in varying increments to purchase an aggregate notional amount of $1.4 million
in foreign currency, maturing at various dates through March 2003. At February
2, 2002, we had 20 contracts maturing in varying increments to purchase an
aggregate notional amount of $16.9 million in foreign currency. Unrealized
pretax losses on these forward contracts totaled approximately $1.2 million at
February 2, 2002. Unrealized pretax gains on these forward contracts totaled
approximately $0.2 million at February 1, 2003. A hypothetical 10% change in
applicable February 1, 2003 forward rates would increase or decrease this pretax
loss by approximately $0.1 million related to these positions. However, it
should be noted that any change in the value of these contracts, whether real or
hypothetical, would be significantly offset by an inverse change in the value of
the underlying hedged item.

Moores conducts its business in Canadian dollars. The exchange rate between
Canadian dollars and U.S. dollars has fluctuated over the last ten years. If the
value of the Canadian dollar against the U.S. dollar weakens, then the revenues
and earnings of our Canadian operations will be reduced when they are translated
to U.S. dollars. Also, the value of our Canadian net assets in U.S. dollars may
decline.

We are also subject to market risk due to our long-term floating rate term
loan of US $40.7 million at February 1, 2003 (see Note 4 of Notes to
Consolidated Financial Statements). An increase in market interest rates would
increase our interest expense and our cash requirements for interest payments.
For example, an average increase of 0.5% in the variable interest rate would
increase our interest expense and payments by approximately $0.2 million.

21

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

INDEPENDENT AUDITORS' REPORT

To the Board of Directors and Stockholders of
The Men's Wearhouse, Inc.
Houston, Texas

We have audited the accompanying consolidated balance sheets of The Men's
Wearhouse, Inc. and its subsidiaries (the "Company") as of February 1, 2003 and
February 2, 2002, and the related consolidated statements of income,
stockholders' equity, and cash flows for each of the three years in the period
ended February 1, 2003. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally
accepted in the United States of America. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, such consolidated financial statements present fairly, in
all material respects, the financial position of the Company as of February 1,
2003 and February 2, 2002, and the results of its operations and its cash flows
for each of the three years in the period ended February 1, 2003 in conformity
with accounting principles generally accepted in the United States of America.

As discussed in Note 1 to the consolidated financial statements, the
Company changed its method of accounting for its foreign currency forward
exchange contracts effective February 4, 2001, to conform to Statement of
Financial Accounting Standards No. 133, "Accounting for Derivative Instruments
and Hedging Activities" and also changed its method of accounting for goodwill
and other intangible assets effective February 3, 2002 to conform to Statement
of Financial Accounting Standards No. 142, "Goodwill and Other Intangible
Assets," as amended.

/s/ DELOITTE & TOUCHE LLP

Houston, Texas
February 24, 2003

22

THE MEN'S WEARHOUSE, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

The accompanying notes are an integral part of these consolidated financial
statements.

23

THE MEN'S WEARHOUSE, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF EARNINGS
FOR THE YEARS ENDED
FEBRUARY 3, 2001, FEBRUARY 2, 2002 AND FEBRUARY 1, 2003

The accompanying notes are an integral part of these consolidated financial
statements.

24

THE MEN'S WEARHOUSE, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
FOR THE YEARS ENDED
FEBRUARY 3, 2001, FEBRUARY 2, 2002 AND FEBRUARY 1, 2003

The accompanying notes are an integral part of these consolidated financial
statements.
25

THE MEN'S WEARHOUSE, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED
FEBRUARY 3, 2001, FEBRUARY 2, 2002 AND FEBRUARY 1, 2003

The accompanying notes are an integral part of these consolidated financial
statements.

26

THE MEN'S WEARHOUSE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED
FEBRUARY 3, 2001, FEBRUARY 2, 2002 AND FEBRUARY 1, 2003

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization and Business -- The Men's Wearhouse, Inc. and its subsidiaries
(the "Company") is a specialty retailer of menswear. We operate throughout the
United States primarily under the brand names of Men's Wearhouse and K&G and
under the brand name of Moores in Canada. We follow the standard fiscal year of
the retail industry, which is a 52-week or 53-week period ending on the Saturday
closest to January 31. Fiscal year 2000 ended on February 3, 2001, fiscal year
2001 ended on February 2, 2002 and fiscal year 2002 ended on February 1, 2003.
Fiscal year 2000 included 53 weeks. Both fiscal years 2001 and 2002 included 52
weeks.

Principles of Consolidation -- The consolidated financial statements
include the accounts of The Men's Wearhouse, Inc. and its wholly owned or
controlled subsidiaries. Intercompany accounts and transactions have been
eliminated in the consolidated financial statements.

Use of Estimates -- The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosures of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates.
The most significant estimates and assumptions are those relating to
inventories, self-insured portions of employee benefit liabilities and
valuations of long-lived assets.

Cash -- Cash includes all cash in banks, cash on hand and all highly liquid
investments with an original maturity of three months or less.

Inventories -- Inventories are valued at the lower of cost or market, with
cost determined on the first-in, first-out method and the retail cost method.
Inventory cost includes procurement and distribution costs (warehousing,
freight, hangers and merchandising costs) associated with ending inventory.

Property and Equipment -- Property and equipment are stated at cost. Normal
repairs and maintenance costs are charged to earnings as incurred and additions
and major improvements are capitalized. The cost of assets retired or otherwise
disposed of and the related allowances for depreciation are eliminated from the
accounts in the year of disposal and the resulting gain or loss is credited or
charged to earnings.

Buildings are depreciated using the straight-line method over their
estimated useful lives of 20 to 25 years. Depreciation of leasehold improvements
is computed on the straight-line method over the term of the lease or useful
life of the assets, whichever is shorter. Furniture, fixtures and equipment are
depreciated using primarily the straight-line method over their estimated useful
lives of three to ten years.

Other Assets -- Other assets consist primarily of tuxedo rental assets,
goodwill and trademarks, tradenames and other intangibles acquired. We initially
record intangible assets at their fair values. Trademarks, tradenames and other
intangibles are amortized over estimated useful lives of 4 to 17 years using the
straight-line method. Identifiable intangible assets with an indefinite useful
life, such as goodwill, are not amortized but are tested for impairment on an
annual basis (see "Accounting Change" herein and Note 8).

Impairment of Long-Lived Assets -- We evaluate the carrying value of
long-lived assets, such as property and equipment and amortizable intangibles,
for impairment whenever events or changes in circumstances indicate that the
carrying amount of an asset may not be recoverable. If it is determined, based
on estimated undiscounted future cash flows, that an impairment has occurred, a
loss is recognized currently for the impairment (see "Accounting Change"
herein).

27

THE MEN'S WEARHOUSE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Fair Value of Financial Instruments -- As of February 2, 2002 and February
1, 2003, management estimates that the fair value of cash, receivables, accounts
payable, accrued expenses and long-term debt are carried at amounts that
reasonably approximate their fair value.

New Store Costs -- Promotion and other costs associated with the opening of
new stores are expensed as incurred.

Store Closures and Relocations -- As of the fourth quarter of 2002, when we
close or relocate a store, the present value of estimated unrecoverable cost,
which is substantially made up of the remaining net lease obligation, is charged
to expense. Prior to the fourth quarter of 2002, these costs were expensed upon
management's commitment to closing or relocating a store, which was generally
before the actual liability was incurred (see "Accounting Change" herein).

Advertising -- Advertising costs are expensed as incurred or, in the case
of media production costs, when the commercial first airs. Advertising expenses
were $69.7 million, $61.2 million and $60.1 million in fiscal 2000, 2001 and
2002, respectively.

Revenue Recognition -- Revenue is recognized at the time of sale and
delivery, net of a provision for estimated sales returns.

Stock Based Compensation -- As permitted by Statement of Financial
Accounting Standards No. 123, "Accounting for Stock-Based Compensation" ("SFAS
No. 123"), we account for stock-based compensation using the intrinsic value
method prescribed in Accounting Principles Board Opinion No. 25, "Accounting for
Stock Issued to Employees." We have adopted the disclosure-only provisions of
SFAS No. 123 and continue to apply APB Opinion 25 and related interpretations in
accounting for the stock option plans and the employee stock purchase plan. Had
we elected to apply the accounting standards of SFAS No. 123, our net earnings
and net earnings per share would have approximated the pro forma amounts
indicated below (in thousands, except per share data):

For purposes of computing pro forma net earnings, the fair value of each
option grant is estimated on the date of grant using the Black-Scholes
option-pricing model, which resulted in a weighted-average fair value of $13.82,
$11.47 and $11.70 for grants made during fiscal 2000, 2001 and 2002,
respectively. The following assumptions were used for option grants in 2000,
2001 and 2002, respectively: expected volatility of 54.71%, 54.01% and 54.14%,
risk-free interest rates (U.S. Treasury five year notes) of 6.67%, 4.57% and
4.29%, and an expected life of six years.

See Note 7 for additional disclosures regarding stock-based compensation.

28

THE MEN'S WEARHOUSE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Derivative Financial Instruments -- We enter into foreign currency forward
exchange contracts to hedge against foreign exchange risks associated with
certain firmly committed, and certain other probable, but not firmly committed,
inventory purchase transactions that are denominated in a foreign currency
(primarily the Euro). Gains and losses associated with these contracts are
accounted for as part of the underlying inventory purchase transactions (see
"Accounting Change" herein).

In connection with our share repurchase programs (Note 7), we from time to
time issue put option contracts and receive premiums for doing so, with the
premiums being added to our capital in excess of par. Under these contracts, the
contract counterparties have the option to require us to purchase a specific
number of shares of our common stock at specific strike prices per share on
specific dates.

Foreign Currency Translation -- Assets and liabilities of foreign
subsidiaries are translated into U.S. dollars at the exchange rates in effect at
each balance sheet date. Shareholders' equity is translated at applicable
historical exchange rates. Income, expense and cash flow items are translated at
average exchange rates during the year. Resulting translation adjustments are
reported as a separate component of shareholders' equity.

Comprehensive Income -- Comprehensive income includes all changes in equity
during the period presented that result from transactions and other economic
events other than transactions with shareholders.

Segment Information -- We consider our business as one operating segment
based on the similar economic characteristics of our three brands. Revenues of
Canadian retail operations were $145.7 million, $144.6 million and $141.9
million for fiscal 2000, 2001 and 2002, respectively. Long-lived assets of our
Canadian operations were $32.8 million and $35.2 million as of the end of fiscal
2001 and 2002, respectively.

Accounting Change -- We adopted Statement of Financial Accounting Standards
No. 133, "Accounting for Derivative Instruments and Hedging Activities" ("SFAS
133"), as amended, on February 4, 2001. In accordance with the transition
provisions of SFAS 133, we recorded a cumulative loss adjustment of $0.5 million
($0.3 million, net of tax) in accumulated other comprehensive loss related
primarily to the unrealized losses on foreign currency exchange contracts, which
were designated as cash-flow hedging instruments. The disclosures required by
SFAS No. 133 are included in Note 9.

We adopted Statement of Financial Accounting Standards No. 141, "Business
Combinations" ("SFAS 141"), on July 1, 2001, and No. 142, "Goodwill and Other
Intangible Assets" ("SFAS 142"), on February 3, 2002. SFAS 141 requires all
business combinations completed after June 30, 2001 to be accounted for using
the purchase method and eliminates the pooling of interests method. SFAS 142
eliminated the amortization of goodwill and also subjects goodwill to fair-value
based impairment tests performed, at a minimum, on an annual basis, or more
frequently if circumstances dictate. The adoption of SFAS 142 did not have a
material impact on our financial position or results of operations and we
recorded no impairment charge. The disclosures required by SFAS 142 are included
in Note 8.

We adopted Statement of Financial Accounting Standards No. 144, "Impairment
or Disposal of Long-lived Assets" ("SFAS 144"), on February 3, 2002. SFAS 144
provides a single accounting model for the impairment or disposal of long-lived
assets. The adoption of this statement did not have a material impact on our
financial position or results of operations.

We adopted Statement of Financial Accounting Standards No. 146, "Accounting
for Costs Associated with Exit or Disposal Activities" ("SFAS 146"), on November
3, 2002. SFAS 146 replaces EITF No. 94-3, "Liability Recognition for Certain
Employee Termination Benefits and Other Costs to Exit an Activity (including
Certain Costs Incurred in a Restructuring)." SFAS 146 requires, among other
things, that a liability for costs associated with an exit or disposal activity
be recognized when the liability is incurred rather than when a company commits
to such an activity and also establishes fair value as the objective for initial

29

THE MEN'S WEARHOUSE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

measurement of the liability. The adoption of this statement did not have a
material impact on our financial position or results of operations.

We adopted Statement of Financial Accounting Standards No. 148, "Accounting
for Stock-Based Compensation -- Transition and Disclosure" ("SFAS 148"), on
February 1, 2003. SFAS 148 amends FASB Statement No. 123, "Accounting for
Stock-Based Compensation" ("SFAS 123"), to provide alternative methods of
transition for a voluntary change to the fair value based method of accounting
for stock-based employee compensation. Additionally, SFAS 148 amends the
disclosure requirements of SFAS 123 to require prominent disclosures in both
annual and interim financial statements about the method of accounting for
stock-based employee compensation and the effect of the method used on reported
results. The adoption of the disclosure requirements of SFAS 148 did not have a
material effect on the Company's financial position or results of operations.
The disclosures required by SFAS 148 are included as part of this note under the
caption "Stock Based Compensation."

In November 2002, the FASB issued Financial Interpretation No. 45 ("FIN
45"), "Guarantor's Accounting and Disclosure Requirements for Guarantees,
Including Indirect Guarantees of Indebtedness of Others." FIN 45 requires that
upon issuance of a guarantee, the guarantor must disclose and recognize a
liability for the fair value of the obligation it assumes under that guarantee.
The initial recognition and measurement requirement of FIN 45 is effective for
guarantees issued or modified after December 31, 2002. As of February 1, 2003,
we did not have any material guarantees that were issued or modified after
December 31, 2002. The disclosure requirements of FIN 45 are effective for
interim and annual periods ending after December 15, 2002 and are applicable to
guarantees issued before December 31, 2002. We did not have any significant
guarantees issued before December 31, 2002.

In November 2002, the Emerging Issues Task Force ("EITF") issued Issue
02-16, "Accounting by a Customer (Including a Reseller) for Cash Consideration
Received from a Vendor." This EITF addresses the accounting treatment for cash
vendor allowances received. The adoption of EITF Issue 02-16 in 2003 did not
have an impact on the Company's financial position or results of operations as
we do not receive any material vendor allowances.

New Accounting Pronouncements -- In June 2001, the FASB issued Statement
No. 143, "Accounting for Asset Retirement Obligations" ("SFAS 143"). SFAS 143
addresses the accounting and reporting for obligations associated with the
retirement of tangible long-lived assets and the associated retirement costs and
is effective for fiscal years beginning after June 15, 2002. The adoption of
this statement will not have a material impact on our financial position or
results of operations.

In April 2002, the FASB issued Statement No. 145, "Rescission of FASB
Statements No. 4, 44, and 64, Amendment of FASB Statement No. 13, and Technical
Corrections" ("SFAS 145"). SFAS 145 rescinds FASB Statement No. 4, "Reporting
Gains and Losses from Extinguishment of Debt," FASB Statement No. 44,
"Accounting for Intangible Assets of Motor Carriers" and FASB Statement No. 64,
"Extinguishments of Debt Made to Satisfy Sinking-Fund Requirements". In
addition, SFAS 145 amends FASB Statement No. 13, "Accounting for Leases," to
eliminate an inconsistency between the required accounting for sale-leaseback
transactions and the required accounting for certain lease modifications that
have economic effects that are similar to sale-leaseback transactions. This
statement also makes non-substantive technical corrections to existing
pronouncements. SFAS 145 is effective for fiscal years beginning after May 15,
2002. The adoption of this statement is not expected to have a material impact
on our financial position or results of operations.

30

THE MEN'S WEARHOUSE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

In January 2003, the Financial Accounting Standards Board issued Financial
Interpretation No. 46 ("FIN 46"), "Consolidation of Variable Interest Entities."
FIN 46 requires that if an entity has a controlling financial interest in a
variable interest entity, the assets, liabilities and results of activities of
the variable interest entity should be included in the consolidated financial
statements of the entity. FIN 46 requires that its provisions are effective
immediately for all arrangements entered into after January 31, 2003. We do not
have any variable interest entities created after January 31, 2003. For any
arrangements entered into prior to January 31, 2003, the FIN 46 provisions are
required to be adopted at the beginning of the first interim or annual period
beginning after June 15, 2003. The adoption of FIN 46 is not expected to have a
material impact on our financial position or results of operations.

2. BUSINESS COMBINATIONS AND ACQUISITIONS

On February 10, 1999, we combined with Moores, a privately owned Canadian
corporation, in exchange for securities ("Exchangeable Shares") exchangeable for
2.5 million shares of our common stock. The Exchangeable Shares were issued to
the shareholders and option holders of Moores in exchange for all of the
outstanding shares of capital stock and options of Moores because of Canadian
tax law considerations. As of February 3, 2001, all Exchangeable Shares, which
had substantially identical economic and legal rights as shares of our common
stock, had been converted on a one-on-one basis to our common stock. As of
January 29, 2000, there were 1.0 million Exchangeable Shares that had not yet
been converted but were reflected as common stock outstanding for financial
reporting purposes by the Company. The combination with Moores has been
accounted for as a pooling of interests.

On June 1, 1999, we combined with K&G, a superstore retailer of men's
apparel and accessories operating 34 stores in 16 states. We issued
approximately 4.4 million shares of our common stock to K&G shareholders based
on an exchange ratio of 0.43 of a share of our common stock for each share of
K&G common stock outstanding. In addition, we converted the outstanding options
to purchase K&G common stock, whether vested or unvested, into options to
purchase 228,000 shares of our common stock based on the exchange ratio of 0.43.
The combination has been accounted for as a pooling of interests.

3. EARNINGS PER SHARE

Basic EPS is computed using the weighted average number of common shares
outstanding during the period and net earnings. Diluted EPS gives effect to the
potential dilution which would have occurred if additional shares were issued
for stock options exercised under the treasury stock method. Diluted EPS also
gives effect to the potential dilution of any put option contracts (Note 7)
outstanding, computed using the reverse treasury stock method. The following
table reconciles the earnings and shares used in the basic and diluted EPS
computations (in thousands, except per share amounts):

31

THE MEN'S WEARHOUSE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

4. LONG-TERM DEBT

In January 2003, we replaced our existing $125.0 million revolving credit
facility which was scheduled to mature in February 2004 with a new revolving
credit agreement with a group of banks (the "Credit Agreement") that provides
for borrowing of up to $100.0 million through February 4, 2006. Advances under
the new Credit Agreement bear interest at a rate per annum equal to, at our
option, the agent's prime rate or the reserve adjusted LIBOR rate plus a varying
interest rate margin. The Credit Agreement also provides for fees applicable to
unused commitments. The terms and conditions of the new Credit Agreement are
substantially the same as those of the replaced facility. As of February 2, 2002
and February 1, 2003, there was no indebtedness outstanding under the respective
credit facilities.

The new Credit Agreement contains various restrictive and financial
covenants, including the requirement to maintain a minimum level of net worth
and certain financial ratios. The Credit Agreement also prohibits payment of
cash dividends on our common stock. We are in compliance with the covenants in
the Credit Agreement.

In addition, in January 2003, we entered into a new Canadian credit
facility which is a term credit agreement under which we borrowed Can$62.0
million (US$40.7 million). The term credit borrowing is payable in quarterly
installments of Can$0.8 million (US$0.5 million) beginning May 2003, with the
remaining unpaid principal payable on February 4, 2008. Borrowings under the new
term credit agreement were used to repay approximately Can$60.9 million (US$40.0
million) in outstanding indebtedness of Moores under the previous term credit
agreement and to fund financing requirements of Moores. The effective interest
rate for the term credit borrowing was 2.8% and 4.3% at February 2, 2002 and
February 1, 2003, respectively. Covenants and interest rates for the term credit
agreement are substantially similar to those contained in our new Credit
Agreement. As of February 2, 2002 and February 1, 2003, there was US$40.1
million and US$40.7 million outstanding under these credit agreements,
respectively.

Maturities of our long-term debt are as follows: 2003 -- $2.0 million;
2004 -- $2.0 million; 2005 -- $2.0 million; 2006 -- $2.0 million; 2007 -- $2.0
million; 2008 -- $30.7 million.

We utilize letters of credit primarily for inventory purchases. At February
1, 2003, letters of credit totaling approximately $10.4 million were issued and
outstanding.

5. INCOME TAXES

The provision for income taxes consists of the following (in thousands):

32

THE MEN'S WEARHOUSE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

No provision for U.S. income taxes or Canadian withholding taxes has been
made on the cumulative undistributed earnings of Moores (approximately $66.9
million at February 1, 2003) since such earnings are considered to be
permanently invested in Canada. The determination of any unrecognized deferred
tax liability for the cumulative undistributed earnings of Moores is not
considered practicable since such liability, if any, will depend on a number of
factors that cannot be known until such time as a decision to repatriate the
earnings might be made by management.

A reconciliation of the statutory federal income tax rate to our effective
tax rate is as follows:

At February 2, 2002, we had net deferred tax liabilities of $3.7 million
with $8.4 million classified as other current assets and $12.1 million
classified as other liabilities (noncurrent). At February 1, 2003, we had net
deferred tax liabilities of $8.1 million with $12.7 million classified as other
current assets and $20.8 million classified as other liabilities (noncurrent).
The state net operating loss and foreign tax credit carryforwards expire in
varying amounts annually from 2005 through 2020 and from 2004 through 2007,
respectively. A valuation allowance is recorded to reduce the carrying amount of
deferred tax assets unless it is more likely than not that such assets will be
realized. As of February 2, 2002 and February 1, 2003, no valuation allowance
was considered necessary.

Total deferred tax assets and liabilities and the related temporary
differences as of February 2, 2002 and February 1, 2003 were as follows (in
thousands):

33

THE MEN'S WEARHOUSE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

6. OTHER ASSETS AND ACCRUED EXPENSES

Other assets consist of the following (in thousands):

Accrued expenses consist of the following (in thousands):

Sales, payroll and property taxes payable................... $ 6,795 $ 8,874
Accrued salary, bonus and vacation.......................... 16,132 17,779
Accrued workers compensation and medical costs.............. 4,167 5,419
Unredeemed gift certificates................................ 8,072 9,992
Deferred gain on sale of assets............................. -- 4,423
Other....................................................... 8,867 8,836
-------- --------
Total.................................................. $ 44,033 $ 55,323
======== ========

7. CAPITAL STOCK, STOCK OPTIONS AND BENEFIT PLANS

In January 2000, the Board of Directors authorized the repurchase of up to
one million shares of our common stock in the open market or in private
transactions. On January 31, 2001, the Board authorized an expansion of the
program for up to an additional two million shares. During 2000, 2001 and 2002,
we repurchased 335,000, 1,185,000 and 1,480,000 shares at a cost of $7.9
million, $30.4 million and $28.1 million, respectively, to complete the program.

On November 19, 2002, the Board of Directors authorized a new stock
repurchase program for up to $25.0 million in shares of our common stock. Under
this authorization, we may purchase shares from time to time in the open market
or in private transactions, depending on market price and other considerations.
As of February 24, 2003, no shares had been repurchased under this program.

In connection with our share repurchase programs, we have from time to time
issued put option contracts and received premiums for doing so, with the
premiums being added to our capital in excess of par and effectively reducing
the cost of our share repurchases. During 2000, we issued three separate
contracts for a total of 650,000 shares and received premiums of $0.9 million.
However, the contracts expired unexercised and all of the 335,000 shares we
repurchased for $7.9 million in 2000 were acquired in open market transactions.
During 2002, we repurchased 980,000 shares of our stock for $16.7 million in the
open market and 500,000 shares for $11.4 million through settlement of an option
contract. We received a premium of $0.6 million for issuing this contract. The
contract counterparty had the option to exercise this contract at a strike price
of $22.76 per share on December 17, 2002, but contract completion was required
earlier if the market price of our common stock fell below a trigger price of
$12.64 per share. During the third quarter of 2002, the market price of our
common stock fell below the trigger price and we settled the contract.

We have adopted the 1992 Stock Option Plan ("1992 Plan") which, as amended,
provides for the grant of options to purchase up to 1,071,507 shares of our
common stock to full-time key employees (excluding certain officers), the 1996
Stock Option Plan ("1996 Plan") which, as amended, provides for the grant of

34

THE MEN'S WEARHOUSE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

options to purchase up to 1,850,000 shares of our common stock to full-time key
employees (excluding certain officers), and the 1998 Key Employee Stock Option
Plan ("1998 Plan") which, as amended, provides for the grant of options to
purchase up to 2,100,000 shares of our common stock to full-time key employees
(excluding certain officers). The 1992 Plan expired in February 2002 and each of
the other plans will expire at the end of ten years; no option may be granted
pursuant to the plans after the expiration date. In fiscal 1992, we also adopted
a Non-Employee Director Stock Option Plan ("Director Plan") which, as amended,
provides for the grant of options to purchase up to 167,500 shares of our common
stock to non-employee directors of the Company. In 2001, the Director Plan's
termination date was extended to February 23, 2012. Options granted under these
plans must be exercised within ten years of the date of grant.

Generally, options granted under the 1992 Plan, 1996 Plan and 1998 Plan
vest at the rate of 1/3 of the shares covered by the grant on each of the first
three anniversaries of the date of grant and may not be issued at a price less
than 50% of the fair market value of our stock on the date of grant. However, a
significant portion of options granted under these Plans vest annually in
varying increments over a period from one to ten years. Options granted under
the Director Plan vest one year after the date of grant and are issued at a
price equal to the fair market value of our stock on the date of grant.

The following table is a summary of our stock option activity:

35

THE MEN'S WEARHOUSE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Grants of stock options outstanding as of February 1, 2003 are summarized
as follows:

As of February 1, 2003, 1,247,147 options were available for grant under
existing plans and 3,878,296 shares of common stock were reserved for future
issuance under these plans.

The difference between the option price and the fair market value of our
common stock on the dates that options for 248,653, 79,479 and 165,105 shares of
common stock were exercised during 2000, 2001 and 2002, respectively, resulted
in a tax benefit to us of $1.4 million in 2000, $0.3 million in 2001 and $0.6
million in 2002, which has been recognized as capital in excess of par. In
addition, we withheld 3,890 shares during 2000 of such common stock for
withholding payments made to satisfy the optionees' income tax liabilities
resulting from the exercises.

We have a profit sharing plan, in the form of an employee stock plan, which
covers all eligible employees, and an employee tax-deferred savings plan.
Contributions to the profit sharing plan are made at the discretion of the Board
of Directors. During 2000, 2001 and 2002, contributions charged to operations
were $2.9 million, $0.4 million and $0.8 million, respectively, for the plans.

In 1998, we adopted an Employee Stock Discount Plan ("ESDP") which allows
employees to authorize after-tax payroll deductions to be used for the purchase
of up to 1,425,000 shares of our common stock at 85% of the lesser of the fair
market value on the first day of the offering period or the fair market value on
the last day of the offering period. We make no contributions to this plan but
pay all brokerage, service and other costs incurred. Effective for offering
periods beginning July 1, 2002, the plan was amended so that a participant may
not purchase more than 125 shares during any calendar quarter. During 2000, 2001
and 2002 employees purchased 44,713, 56,617 and 51,359 shares, respectively,
under the ESDP, the weighted-average fair value of which was $22.82, $16.63 and
$14.82 per share, respectively. As of February 1, 2003, 1,203,242 shares were
reserved for future issuance under the ESDP.

8. GOODWILL AND OTHER INTANGIBLE ASSETS

We adopted SFAS 142, "Goodwill and Other Intangible Assets," on February 3,
2002, as noted in Note 1. In accordance with SFAS 142, we discontinued the
amortization of goodwill effective February 3, 2002. Additionally, SFAS 142 also
subjects goodwill to fair-value based impairment tests performed, at a minimum,
on an annual basis, or more frequently if circumstances dictate. We completed
the transitional impairment test of goodwill as of February 3, 2002 during the
first quarter of 2002 and the annual impairment test of goodwill during the
fourth quarter of 2002. No impairment charges were recorded.

36

THE MEN'S WEARHOUSE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Had we applied SFAS 142 during 2000 and 2001, our net earnings and net
earnings per share would have approximated the pro forma amounts indicated below
(in thousands, except per share amounts):

Goodwill and other intangibles are included in other assets in the
accompanying balance sheet. Changes in the net carrying amount of goodwill for
the years ended February 2, 2002 and February 1, 2003 are as follows (in
thousands):

Balance, February 3, 2001................................................... $38,447
Goodwill of acquired business............................................. 1,069
Amortization of goodwill.................................................. (2,800)
Translation adjustment.................................................... (1,155)
-------
Balance, February 2, 2002................................................... 35,561
Goodwill of acquired business............................................. 233
Translation adjustment.................................................... 813
-------
Balance, February 1, 2003................................................... $36,607
=======

The gross carrying amounts and accumulated amortization of our other
intangibles are as follows (in thousands):

The pretax amortization expense associated with intangible assets totaled
approximately $269,000, $346,000 and $428,000 for fiscal years 2000, 2001 and
2002, respectively. Pretax amortization expense associated with intangible
assets at February 1, 2003 is estimated to be approximately $617,000 for each of
the fiscal years 2003 through 2005, $579,000 for fiscal year 2006 and $457,000
for fiscal year 2007.

37

THE MEN'S WEARHOUSE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

9. COMMITMENTS AND CONTINGENCIES

LEASE COMMITMENTS

We lease retail business locations, office and warehouse facilities,
computer equipment and automotive equipment under operating leases expiring in
various years through 2018. Rent expense for fiscal 2000, 2001 and 2002 was
$71.8 million, $78.3 million and $86.0 million, respectively, and includes
contingent rentals of $0.4 million, $0.3 million and $0.8 million, respectively.
Minimum future rental payments under noncancelable operating leases as of
February 1, 2003 for each of the next five years and in the aggregate are as
follows (in thousands):

Leases on retail business locations specify minimum rentals plus common
area maintenance charges and possible additional rentals based upon percentages
of sales. Most of the retail business location leases provide for renewal
options at rates specified in the leases. In the normal course of business,
these leases are generally renewed or replaced by other leases.

LEGAL MATTERS

On May 11, 2001, a lawsuit was filed against the Company in the Superior
Court of California for the County of San Diego, Cause No. GIC 767223 (the "San
Diego County Suit"). The San Diego County Suit, which was brought as a purported
class action, alleges several causes of action, each based on the factual
allegation that we advertised and sold men's slacks at a marked price that was
exclusive of a hemming fee for the pants. The San Diego County Suit seeks: (i)
permanent and preliminary injunctions against advertising slacks at prices which
do not include hemming; (ii) restitution of all funds allegedly acquired by
means of any act or practice declared by the Court to be unlawful or fraudulent
or to constitute unfair competition under certain California statutes, (iii)
prejudgment interest; (iv) compensatory and punitive damages; (v) attorney's
fees; and (vi) costs of suit. We believe that the San Diego County Suit is
without merit and the allegations are contrary to customary and well recognized
and accepted practices in the sale of men's tailored clothing. The complaint in
the San Diego County Suit was subsequently amended to add similar causes of
action and requests for relief based upon allegations that our alleged "claims
that [it] sell[s] the same garments as department stores at 20% to 30% less" are
false and misleading. We believe that such added causes of action are also
without merit. The court ruled against the plaintiff's motion for class
certification, declining to certify a class. On October 17, 2002, the court
granted summary adjudication in favor of the Company on the plaintiff's false
advertising claim on behalf of the general public relating to hemming fees, and
also reaffirmed its earlier ruling denying class certification. The court found
there were triable issues of fact, and therefore denied summary adjudication on
the remaining claims. The court has tentatively set a trial date for May 19,
2003. The Company intends to vigorously defend the San Diego County Suit.

On April 18, 2003, a lawsuit was filed against the Company in the Superior
Court of California for the County of Orange, Case No. 03CC00132 (the "Orange
County Suit"). On April 21, 2003, a lawsuit was filed against K&G Men's Center,
Inc. and K&G Men's Company Inc. (collectively, "K&G"), wholly owned

38

THE MEN'S WEARHOUSE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

subsidiaries of the Company, in the Los Angeles Superior Court of California,
Case No. BC294361 (the "Los Angeles County Suit"; the Los Angeles County Suit
and the Orange County Suit shall be referred to jointly as the "Suits"). The
Suits, which were both brought as purported class actions, allege several causes
of action, each based on the factual allegation that in the State of California
the Company and K&G misclassified its managers and assistant managers as exempt
from the application of certain California labor statutes. Because of this
misclassification, the Suits allege that the Company and K&G failed to pay
overtime compensation and provide the required rest periods to such employees.
The Suits seek, among other things, declaratory and injunctive relief along with
an accounting as to alleged wages, premium pay, penalties, interest and
restitution allegedly due the class defendants. We believe that our managers and
assistant managers were properly classified as exempt under such statutes and,
therefore, properly compensated. The Company believes that the Suits are without
merit and intends to vigorously defend them.

In addition, we are involved in various routine legal proceedings,
including ongoing litigation, incidental to the conduct of our business.
Management believes that none of these matters will have a material adverse
effect on our financial condition or results of operations.

CURRENCY CONTRACTS

In connection with our direct sourcing program, we may enter into purchase
commitments that are denominated in a foreign currency (primarily the Euro). Our
policy is to enter into foreign currency forward exchange contracts to minimize
foreign currency exposure related to forecasted purchases of certain
inventories. Under SFAS 133, such contracts have been designated as and
accounted for as cash flow hedges. The settlement terms of the forward
contracts, including amount, currency and maturity, correspond with payment
terms for the merchandise inventories. Any ineffective portion of a hedge is
reported in earnings immediately. At February 1, 2003, the Company had four
contracts maturing in varying increments to purchase an aggregate notional
amount of $1.4 million in foreign currency, maturing at various dates through
March 2003.

The changes in the fair value of the foreign currency forward exchange
contracts are matched to inventory purchases by period and are recognized in
earnings as such inventory is sold. The fair value of the forward exchange
contracts is estimated by comparing the cost of the foreign currency to be
purchased under the contracts using the exchange rates obtained under the
contracts (adjusted for forward points) to the hypothetical cost using the spot
rate at year end. We expect to recognize in earnings through January 31, 2004
approximately $0.1 million, net of tax, of existing net gains presently deferred
in accumulated other comprehensive income.

39

THE MEN'S WEARHOUSE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

10. QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)

Our quarterly results of operations reflect all adjustments, consisting
only of normal, recurring adjustments, which are, in the opinion of management,
necessary for a fair statement of the results for the interim periods presented.
The consolidated results of operations by quarter for the 2001 and 2002 fiscal
years are presented below (in thousands, except per share amounts):

Due to the method of calculating weighted average common shares
outstanding, the sum of the quarterly per share amounts may not equal earnings
per share for the respective years.

40

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE

None.

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY

The information required by this Item is incorporated herein by reference
from the Company's Proxy Statement for its Annual Meeting of Shareholders to be
held July 1, 2003.

ITEM 11. EXECUTIVE COMPENSATION

The information required by this Item is incorporated herein by reference
from the Company's Proxy Statement for its Annual Meeting of Shareholders to be
held July 1, 2003.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth certain equity compensation plan information
for The Men's Wearhouse as of February 1, 2003.

- ---------------

(1) The Company has adopted the 1998 Key Employee Stock Option Plan (the "1998
Plan") which, as amended, provides for the grant of options to purchase up
to 2,100,000 shares of the Company's common stock to full-time key employees
(excluding executive officers), of which 1,296,591 shares are to be issued
upon the exercise of outstanding options and 609,820 shares remain available
for future issuance under the 1998 Plan. Options granted under the 1998 Plan
must be exercised within ten years from the date of grant. Unless otherwise
provided by the Stock Option Committee, options granted under the 1998 Plan
vest at the rate of 1/3 of the shares covered by the grant on each of the
first three anniversaries of the date of grant and may not be issued at a
price less than 50% of the fair market value of our stock on the date of
grant. However, a significant portion of options granted under these Plans
vest annually in varying increments over a period from one to ten years.

In connection with the merger with K&G Men's Center, Inc. in June 1999, the
Company granted substitute options to certain holders of options to
purchase shares of common stock of K&G Men's Center, Inc. who were not
eligible to participate in the Company's stock option plans at a weighted-
average exercise price of $38.60. Of the 62,134 shares initially reserved
for issuance pursuant to such options, options covering 24,724 shares
remain unexercised at this time.

In connection with other acquisitions, the Company entered into employment
or consulting arrangements with certain key individuals at the acquired
companies and issued to them options to purchase 30,000 shares at an
exercise price of $17.42 and 22,500 shares at an exercise price of $24.25,
all of which remain unexercised.

41

The additional information required by Item 12 is incorporated herein by
reference from the Company's Proxy Statement for its Annual Meeting of
Shareholders to be held July 1, 2003.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The information required by this Item is incorporated herein by reference
from the Company's Proxy Statement for its Annual Meeting of Shareholders to be
held July 1, 2003.

ITEM 14. DISCLOSURE CONTROLS AND PROCEDURES

EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES

Within 90 days prior to the filing of this report, under the supervision
and with the participation of the Company's management, including the Company's
Chief Executive Officer (CEO) and Chief Financial Officer (CFO), an evaluation
of the effectiveness of the Company's disclosure controls and procedures was
performed. Based on this evaluation, the CEO and CFO have concluded that the
Company's disclosure controls and procedures are effective to ensure that
material information is recorded, processed, summarized and reported by
management of the Company on a timely basis in order to comply with the
Company's disclosure obligations under the Securities Exchange Act of 1934 and
the SEC rules thereunder.

CHANGES IN INTERNAL CONTROLS

There were no significant changes in the Company's internal controls or in
other factors that could significantly affect these controls subsequent to the
date of the evaluation.

PART IV

ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

(a) 1. Financial Statements

The following consolidated financial statements of the Company are included
in Part II, Item 8.

Independent Auditors' Report

Consolidated Balance Sheets as of February 2, 2002 and February 1, 2003

Consolidated Statements of Earnings for the years ended February 3, 2001,
February 2, 2002 and February 1, 2003

Consolidated Statements of Shareholders' Equity for the years ended
February 3, 2001, February 2, 2002 and February 1, 2003

Consolidated Statements of Cash Flows for the years ended February 3, 2001,
February 2, 2002 and February 1, 2003

Notes to Consolidated Financial Statements

2. Financial Statement Schedules

All such schedules are omitted because they are not applicable or because
the required information is included in the Consolidated Financial Statements or
Notes thereto.

3. Exhibits

- ---------------

* Management Compensation or Incentive Plan

The Company will furnish a copy of any exhibit described above to any
beneficial holder of its securities upon receipt of a written request therefor,
provided that such request sets forth a good faith representation that, as of
the record date for the Company's 2003 Annual Meeting of Shareholders, such
beneficial holder is entitled to vote at such meeting, and provided further that
such holder pays to the Company a fee compensating the Company for its
reasonable expenses in furnishing such exhibits.

(b) Reports on Form 8-K

On December 5, 2002, the Company filed a current report on Form 8-K related
to certain changes made to the Company's 401(k) Savings Plan.

44

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.

THE MEN'S WEARHOUSE, INC.

By /s/ GEORGE ZIMMER
------------------------------------
George Zimmer
Chairman of the Board and
Chief Executive Officer

Dated: May 2, 2003

Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacity and on the dates indicated.

45

I, George Zimmer, certify that:

1. I have reviewed this annual report on Form 10-K of The Men's Wearhouse,
Inc.;

2. Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this annual
report;

3. Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this annual report;

4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities,
particularly during the period in which this annual report is being
prepared;

b) evaluated the effectiveness of the registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date of this
annual report (the "Evaluation Date"); and

c) presented in this annual report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;

5. The registrant's other certifying officers and I have disclosed, based
on our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent functions):

a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to record,
process, summarize and report financial data and have identified for the
registrant's auditors any material weaknesses in internal controls; and

b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's internal
controls; and

6. The registrant's other certifying officers and I have indicated in this
annual report whether or not there were significant changes in internal controls
or in other factors that could significantly affect internal controls subsequent
to the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.

By /s/ GEORGE ZIMMER
------------------------------------
George Zimmer
Chairman of the Board and
Chief Executive Officer

Dated: May 2, 2003

46

I, Neill P. Davis, certify that:

1. I have reviewed this annual report on Form 10-K of The Men's Wearhouse,
Inc.;

2. Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this annual
report;

3. Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this annual report;

4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities,
particularly during the period in which this annual report is being
prepared;

b) evaluated the effectiveness of the registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date of this
annual report (the "Evaluation Date"); and

c) presented in this annual report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;

5. The registrant's other certifying officers and I have disclosed, based
on our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent functions):

a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to record,
process, summarize and report financial data and have identified for the
registrant's auditors any material weaknesses in internal controls; and

b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's internal
controls; and

6. The registrant's other certifying officers and I have indicated in this
annual report whether or not there were significant changes in internal controls
or in other factors that could significantly affect internal controls subsequent
to the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.

By /s/ NEILL P. DAVIS
------------------------------------
Neill P. Davis
Executive Vice President, Chief
Financial Officer
and Principal Financial Officer

Dated: May 2, 2003

47

EXHIBIT INDEX

- ---------------

* Management Compensation or Incentive Plan

49