George Zimmer on Men’s Wearhouse at 40.
“It’s difficult for me at times,” confides Men’s Wearhouse executive chairman George Zimmer. “I still come in to work every day; I still work in the same office as always. The only difference is that there’s another CEO sitting 20 feet away from me and he’s the one making 99 percent of the decisions. I’m not sure any retail executive has ever been in this position before: founded a company, run it for 40 years and then turned over the reins without retiring. But I chose this route because I believe that the best time to make changes is when things are going well. And Doug Ewert is a terrific CEO: he’s worked with the company almost 20 years; he’s the perfect combination of a modern, evidence-based business exec and a visionary who believes in the intangible and the invisible…”
A belief in the intangible and the invisible. It’s become a mantra of sorts for Men’s Wearhouse executives, but until you spend a fair amount of time with them it’s hard to believe in its authenticity. But trust us: it’s for real, and it’s this singular belief that most distinguishes Men’s Wearhouse from the competition. It’s what’s accounted for its success, what’s inspired the team for the past 40 years and what will continue to move it forward toward a yet-to-be defined future direction.
According to Zimmer, one of his key roles at the company these days is the three-day manager meetings held annually each February in Northern California. “We have 12 meetings with about 250 people each time: Doug and I attend all of them. I’m not sure why Doug does it, but I think he’s determined to go to every meeting until he drops… As for me, I truly love it: it’s one of the most fun things I do all year. I’m basically still a kid and feel lucky that since founding the company 40 years ago, I’ve been able to remain a kid, even as I’ve aged into my 60s. And at these meetings, since I’m the center of attention, I can be as kid-like as I want. That said, I take them very seriously: I know that my performance is the only one each manager is going to get and they need it to be the best. It’s also interesting to me how different Doug and I are, but the juxtaposition is perfect!”
According to Zimmer, Doug’s spiel (“always organized and easy to follow, with increasing spontaneity as times goes on”), focuses on the half-dozen things the company is doing well, the half-dozen challenges, and the half-dozen opportunities. “He talks about things like agility, adaptability, thinking on your feet, a willingness to change your mind. One of the key lessons is not to let pride of authorship prevent you from working collaboratively. It’s wonderful stuff, but the truth is that we’ve been doing this for 40 years and there really isn’t a lot of new material unless you talk about the details of technology.”
And speaking of technology, Zimmer maintains that Men’s Wearhouse has been on the cutting edge for many years. “We’ve been tracking customer purchases for 30 years now. Until the late ’90s we would print out these perforated sheets that we sent to every employee listing everything each of their customers bought by vendor, size, color, price… Now, of course, we’re using e-mail and soon we hope to personalize e-mail by data mining.”
In fact, innovative technology is one of three reasons that Zimmer is as optimistic as ever about the future of Men’s Wearhouse. “I start my talk at the manager meetings by saying ‘Here I am after 40 years and I’m still as optimistic as ever; you’re entitled to know why.’ And my three reasons are that we’re financially sound, technologically innovative and culturally exceptional based on outstanding employees.”
He addresses each point separately, starting with the financial. “We are a completely unleveraged company: we don’t borrow money, which gives us great flexibility in terms of opening new stores, remodeling existing ones, and making acquisitions.
“That said, we might for the first time borrow money this year based on outside pressure: in today’s crazy world, not borrowing money is considered a negative.
“As for our innovative technology, our tuxedo rental business is a perfect example. When we launched it in 1999, no one was doing it and even now, after more than a dozen years, hardly anyone is doing it (although our competition is trying). For us, it’s about a $400 million business which means that the average Men’s Wearhouse store does close to half a million in tuxedo rentals. And who knows how high is up…
“How do we do it? Our technology allows customers to rent in one place, pick up anywhere, return anywhere and we get it 99 percent right. It’s all about the willingness of our workforce to apply themselves to this; it requires tremendous attention to minutia. Many experts had told us that it couldn’t be done, that only crazy people would even attempt it… But we do it because this is who we are and this is how we run our company and this is how we treat each other. We now have a tuxedo manager in every store and their primary mission is to be helpful. Our general philosophy is that we’re all part of a team and everyone has a different position. At any given moment, not all positions are of equal importance but taken together, it’s a winner. When I explain this aspect of our philosophy, people stand up and applaud…”
Asked about Men’s Wearhouse’s online business, Zimmer confides that it’s not huge. “But we’ve developed a sort of hybrid system between bricks and clicks and so we have well over a million unique visitors a month on our site. We never went into e-commerce in the classic sense: most customers visit our website and then shop in the stores. But we’ve also created a concept called pre-sell using technology written by Men’s Wearhouse people. The way it works is this: when a customer comes into a store, he is looking at, let’s say 2,000 suits. On our pre-sell system, this customer can dramatically expand his selection to 100,000 suits. Let’s say they select and try on a navy suit in the store; the sales associate can pull out his iPad and show him four other swatches in that exact suit, which he can select and have altered to be ready within the same five days that he’s getting his in-store purchase. It’s an add-on sale that’s particularly beneficial to customers who want to take advantage of the BOGO promotions. It’s also much more personal than shopping online, since the customer has touched it and tried it on and is working with an actual person.”
On what he’s most proud of, Zimmer talks passionately about the company’s corporate culture, a phenomenon that has put them once again on Fortune magazine’s list of Best Companies to Work For. “There’s virtually no apparel company ahead of us on the list, which is gratifying, but not all that surprising considering how the technology companies have made the old staples far less valuable on Wall Street. That said, we’ve had a great run with Men’s Wearhouse! Perhaps we could have made more money doing something else, but there are also lots of ways we could have made less money. Clearly, it’s more difficult in apparel: the margins are very different. But I love what I do and while I’ve thought of retiring, I enjoy it too much to give it up. And why would I? It’s not like I set an alarm in the morning; I essentially do what I want. Unlike in sports where an athletic career is over by age 40, in this business, 40 means you’re just hitting your prime. And by 60, things actually get easier: I’ve witnessed a good number of recessions by now; I’ve employed a number of different strategies to get through them; things seem a bit familiar.
“In fact, one of the lessons I’ve tried to transmit to Doug (although it’s not really something that can be taught; one needs to understand it experientially) is not to overreact to the quarterly reports. The system is so unnatural, ridiculous really, since there’s tremendous volatility from quarter to quarter. It’s absurd: no one in private companies has to stress out like we in public companies do. In fact, I don’t think it’s melodramatic to say that in an insidious way, the stock market has evolved to a casino mentality, only a lot less fun…”
Caveat: George Zimmer has strong opinions about almost everything, so unless you’re prepared for intense debate, don’t get him started on controversial issues like our tax structure (“Why does America have well over a trillion dollars in corporate money off-shore? These companies are paying 10 to 15 percent to foreign governments so as not to pay 35 percent here. What we need to do is lower corporate tax rates so they don’t move this money off-shore. Or on legalizing marijuana or erotic art or whether gay adults should be scout leaders or on America’s current political leadership (which he finds somewhat lacking…). Asked if he’s considered running for office himself, Zimmer admits that he has. “I’ve often thought about it: I’ve been very involved in politics since the ’60s, plus I’m highly recognizable from so many years of doing TV commercials. But clearly, my beliefs are too extreme and too far ahead of public sentiment. They’d never resonate outside the northeast. I’m a much better visionary than I am a politician. In all likelihood, I’m totally unelectable.”
So who is George Zimmer really? He’s been called everything from genius, entrepreneur and visionary to philosopher, family man, and “a bit wacky…” Having recently recovered from some serious medical issues (he’s fine now), he’s at the gym five times a week (weights, rowing, floor work). He hasn’t had a drink in 30 years and he gave up cigarettes eight years ago. He adores his kids, including a daughter who’s a successful photographer in San Diego, a son who’s a brilliant writer and a 13-year-old son who’s a terrific athlete. He’s an avid reader (currently a book about a young American guy who joined the IDF in Israel) and, as previously noted, he can talk with genuine passion to anyone about anything.
The most interesting man in the world? “Believe it or not, I’m often compared to the Dos Equis guy. If you study photos of us, the resemblance is amazing! (We even toyed around with doing a split-screen advertisement for Men’s Wearhouse…) So, for what it’s worth, I conclude with this: Stay thirsty my friends; stay thirsty…”