JoS A. Bank Clothiers gives back week's gains

Shares of men's clothing retailer JoS. A. Bank Clothiers Inc. tumbled more than 20 percent Wednesday, one day after setting a new 52-week high.

The stock has been heavily short-sold, a time-honored method for profiting when a stock drops, and that process spurred the stock to record highs recently, Margaret Whitfield, retail analyst at Sterne, Agee and Leach Equity Research, said in an interview.

According to Thomson Reuters, short interest in the stock totaled nearly 85 percent as of Sept. 15, down from 96 percent late last month.

The stock rose more than 35 percent in one week when it hit a 52-week high of $41.71 on Tuesday, Whitfield said.

The analyst added that the rally may have been spurred by a "short squeeze" in which short sellers were seeking to cover their positions in the stock.

By Wednesday afternoon, shares fell $8.05, or 20.3 percent, to close at $31.66, still far above the stock's 52-week low of $18.81 set in March. Volume totaled nearly 2.7 million shares, well above the daily average of 1.5 million shares traded.

Investors "sell short" if they think the shares of a particular company are going to decline and they want to profit from the drop.

Whitfield said she still had a $50 target on the stock, and it has been performing well in the tough market even as consumers pull back their spending. She said the Hampstead, Md., company is seeing success with promotions, such as a recent buy-one-get-two suit sale. JoS. A. Bank Clothiers operates 450 stores as well as a catalog and online store.