George Zimmer still has his eye on The Men’s Wearhouse Inc.
Financial sources said the former chairman and founder of the men’s retailer is still plotting a takeover of the company.
According to sources, Zimmer has been making the rounds and reaching out to any private equity firm that might be a potential partner in a leveraged buyout of the $2.5 billion retailer. One problem: any attempt is likely to be in the form of a hostile bid since the retailer’s board has said it is not interested in selling the company. This follows Zimmer’s reaching out to investment banking firms earlier in the year about taking the retail chain private.
Two financial sponsors that Zimmer, or someone connected to him, is said to have reached out to as potential LBO partners are Guggenheim Partners and Apax Partners. Both have experience in retail investments and in the fashion sector.
Spokesmen for both Guggenheim and Apax declined comment.
Financial and market sources said Zimmer has reached out to the firms within the past month or so. But it wasn’t immediately clear whether any overture was also made shortly before he left the retailer in June.
WWD also learned that Apax, at least, isn’t interested in pursuing any dialogue with Zimmer. It couldn’t be determined whether Zimmer has been successful in garnering any interest from Guggenheim, but a source said there are probably no ongoing discussions between the two at this point either. While Guggenheim has been hunting for appropriate investments, it is not a particular fan of hostile takeovers.
Zimmer, who owns 3.5 percent of the company’s stock, declined comment. Current Men’s Wearhouse chief executive officer Doug Ewert could not be reached for comment.
“It’s obvious that he’s going to make an offer,” said William Susman, founder of the boutique advisory and research firm Threadstone Partners. “Hell hath no fury like a retail executive scorned. But the board will fight him tooth and nail and I don’t think he’s going to get it.”
While some investment professionals said they believe Men’s Wearhouse would be an ideal LBO candidate due to its clean balance sheet and no debt, others point to the difficulties at hand in finding a sponsor when there is a board that so obviously is against the idea.
Two years after turning the ceo reins over to Ewert, Zimmer “advocated for significant changes that would enable him to regain control, but ultimately he was unable to convince any of the board members or senior executives that his positions were in the best interests of employees, shareholders or the company’s future,” the Men’s Wearhouse board said on June 25, a day after the company founder resigned his board seat and less than a week after he was ousted as executive chairman.
The board additionally said at the time that Zimmer “had difficulty accepting the fact that Men’s Wearhouse is a public company with an independent board of directors and that he has not been the chief executive officer for two years.” When his repeated attempts to be the primary decision-maker — attempts that included demands for “veto power over significant corporate decisions” — were not granted, Zimmer started talking to investment banking firms about buying the company.
Zimmer’s LBO plan is a reversal of what had been a long-standing position against taking the men’s retailer private.
In the last few months of his tenure, Zimmer’s dissatisfaction with existing management’s decisions seemed to expand on multiple fronts. He supposedly disagreed with the decision to sell the K&G Fashion Superstore division.
And he also was said to disagree with the positioning of designer Joseph Abboud as the style expert for the company.
Donatella Versace will receive the International Award at the 2018 @cfda awards, which were announced tonight. Tap link in bio for a list of all the nominees and honorees. #wwdnews #wwdfashion (📷: @rahirezvanistudio )
The 2018 @cfda Awards nominees are out! @virgilabloh for @off____white for is nominated for Womenswear Designer of the Year. Tap link in bio for all the nominees. #wwdnews #wwdfashion ( 📷: @simonelezzi)
@chanelofficial is suing high-end vintage retailer @whatgoesaroundnyc for trademark infringement, a move that could cost the retailer millions. The French fashion house claims that it’s not only unintentionally sold counterfeit goods on occasion, but that it’s “gone out of its way to create an association with Chanel,” which does not exist. Read Chanel’s statement on WWD.com #wwdnews (@aitorrosasphoto)
Exclusive: Guillaume Henry has left @ninaricci, the fashion house said on Thursday. “After three years of mutually gratifying creative collaboration, Nina Ricci and Guillaume Henry have together decided that the designer will depart the house after the presentation of the fall-winter 2018-19 collection,” Ricci said in a statement. Get all the details on WWD.com #wwdfashion (📷: @aitorrosasphoto)
“When Bella enters a room all heads turn,” said @peterphilipsmakeup, creative and image director for @diormakeup. Last night, the two celebrated the product launch of Dior’s Lacquer Plump in Los Angeles with other celebs like @parisjackson, @winnieharlow and more. Head to WWD.com to see the rest of the photos from the night (📷: @chelsealaurenla) #wwdeye
“These shirts are an art form, it’s about getting the message out to as many people as you can. It breaks down the pretentiousness of the art gallery,” says Kumasi Sadiki, cofounder of @ebayontheblock, a store that sells merchandise by New York artists who are shifting their attention to clothes as a wearable medium. Pictured here is a design by artist @joegarvey_, one of the first to spearhead this movement. Head to WWD.com to read @mistywhitesidell full story on how their designs have become merch for the underground elite #wwdfashion
@netaporter is dedicating a part of its website – called the Fine Jewelry and Watch Destination – to highlight its high-end jewelry. The hub will feature products on the site, as well as incorporate styling advice and educational content about high-priced jewelry items. Get more details on WWD.com. #wwdaccessories
For “The Cher Show,” an upcoming musical based on @cher’s life and career, @bobmackie is once again collaborating with the singer in designing the costumes. For decades, Mackie has designed glitzy stage costumes and red carpet looks for the 71-year-old Grammy winner. Pictured here is a sketch of some of the pieces in the wardrobe of the musical, which is set to debut in Chicago on June 12 before making its way to Broadway #wwdeye