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Happy Employees the ‘Secret Sauce’ at Men’s Wearhouse

For the 12th year in a row, the retailer has been ranked among Fortune magazine’s top 100 companies to work for.

Douglas Ewert
Appeared In
Special Issue
Men'sWeek issue 03/28/2013

The Men’s Wearhouse has come a long way since road salesman George Zimmer opened his first storefront in Houston in 1973 to move some polyester sport coats he had left over after Foley’s canceled an order. “The May Co. played a pivotal role in the start of the Men’s Wearhouse,” chief executive officer Douglas Ewert said with a chuckle.

Forty years later, the company has grown into a $2.5 billion behemoth with the leading market share in men’s wear retailing in both the U.S. and Canada. It operates 640 Men’s Wearhouse stores along with 280 tuxedo rental units in the U.S. and 120 Moores stores in Canada, as well as 97 K&G superstores, a uniform division and a dry-cleaning operation. Over the years, it has acquired a number of competitors, including C&R Clothiers, Kuppenheimer, Today’s Man, After Hours and K&G, enhancing its position in the industry.

In tracing the brand’s evolution, Ewert showed one of the company’s first commercials, which featured two actors dressed in Seventies-era leisure suits literally shouting about the price advantages that could be found at Men’s Wearhouse — think Crazy Eddie. They touted that a customer at the Men’s Wearhouse could get two suits for the price of one at another store. “Not pretty, but it was pretty effective,” Ewert said, adding, “The BOGO [buy one, get one free] has been around for a while.”

While sharp pricing continues to be a hallmark of the company, Ewert attributed Men’s Wearhouse’s success in large part to an intangible, something he called “our secret sauce” — happy employees. “We believe if our employees are happy, all of our other stakeholders will be taken care of.”

 

Ewert said that for the 12th year in a row, Men’s Wearhouse has been ranked among Fortune magazine’s top 100 companies to work for, moving up in the rankings to number 50 this year. He said employees are given a three-week sabbatical after five years, and top performers are rewarded with $10,000 cash awards. In 2012, he said, the company gave $1 million in awards to employees. It throws black-tie parties every holiday season in the different markets in which it operates stores. “We focus on having fun,” he said.

It also focuses on giving back, spearheading a clothing drive every year where customers trade in gently used clothing that is donated to disadvantaged men to wear to get back into the workforce. Last year, 130,000 suits were donated, he said.

However, it’s not all fun and philanthropy. Ewert said the company is on track to significantly grow its business over the next several years and believes it can “profitably operate” 750 Men’s Wearhouse stores, and is “on track to open 30 stores a year” until it reaches that number. There is also opportunity to significantly grow its fledgling outlet division, where there are currently four stores in operation. Ewert said the company envisions at least 100 of these off-price units in outlet centers around the U.S. 250 tuxedo rental stores in the U.S.

In Canada, Ewert said, the company will continue to expand Moores, adding another five to 10 stores.

In both countries, older stores are being remodeled at the rate of about 100 stores a year. So far, about half the fleet has been updated.

But the “single most exciting thing” for the company in recent times is that is has become more “relevant to the Millennial generation,” he said. “We essentially built this company on the backs of the Baby Boomers,” he said. “But we are not necessarily tagged as the place your dad buys his suit.”

Baby Boomers look at the suit as a “uniform,” he continued, while the Millennials view it as a choice and use their wardrobe to express their individuality. Because of Men’s Wearhouse’s large tuxedo rental business, the company draws young men into its stores for their prom rentals or weddings, and offers updated silhouettes and modern styles to appeal to him while he’s there, so it remains “relevant to them for their entire adult lives.” Because the average groom is 27 years old and most high school seniors are around 17, he called tuxedo rentals a “magnet for the Millennials” since 3.5 million visit the stores every year for this product.

The company is also “investing heavily in marketing,” in traditional media such as television as well as on the Web, to “engage” this customer. Although he admitted that the company is still “fumbling around” in the omnichannel space, it recently launched a mobile app for wedding parties as well as a prom rep program to appeal to these young shoppers. New television commercials have targeted this group as well, with slim-fit suits and sportswear taking center stage.

Ewert said that slim-fit models of suits now account for 30 percent of the company’s overall sales and are the fastest-growing category in the stores.

Looking ahead, he expects new chief creative director Joseph Abboud to continue to “upgrade the quality and design aesthetic of the products we manufacture ourselves.” His arrival also “puts us in the market to acquire and build brands,” Ewert said.

He pointed to the addition of Black by Vera Wang, a more modern formal wear offering, as evidence that the company “can build powerful brands very quickly.” Since hitting stores last spring, the line has racked up $125 million in sales, he revealed.

Ewert also provided the first laughs of the day at the Summit, saying that if attendees didn’t believe that he had provided value to them through his presentation, they could e-mail him for a gift card to the Men’s Wearhouse to get their money’s worth.