George Zimmer just lost $10 million — and he couldn’t be happier about it.
“I feel totally vindicated. If nothing else happened in my life, I would die a happy man right now,” said the founder and former executive chairman of Men’s Wearhouse Inc. in an exclusive interview, talking about the steep decline in the retailer’s share price over the last six months as it struggles to absorb its acquisition of Jos. A. Bank.
Zimmer owned 3.5 percent of Men’s Wearhouse at last count, so he still has plenty of skin in the game.
And he’s ready to talk if Men’s Wearhouse wants to.
Two-and-a-half years after being ousted from the company, Zimmer believes he has the experience and wherewithal to rescue the retailer. He’s ready to consider all possibilities, whether it be rejoining the management team or working with an outside party to acquire the firm he founded in 1973.
“Under the right terms, I would look at it, you bet, but it would have to be pretty sweet,” he said.
Men’s Wearhouse stock has lost 77 percent of its value since June, although its shares rose 7.1 percent Wednesday to $14.54. But that still leaves the struggling retailer with a market capitalization of just $703 million — well below the $1.8 billion paid to bring Jos. A. Bank on board. Men’s Wearhouse’s strategy to soften Jos. A. Bank’s aggressive promotional stance has been disastrous, with the division’s fourth-quarter same-store sales trending down 35.1 percent through the first week of December. The company’s third-quarter losses tallied $27.2 million, down from earnings of $6.8 million a year earlier.
Which is why Zimmer is happy —because he gets to shout, “I told you so.”
Zimmer was unceremoniously dumped as executive chairman in June 2013 when he floated the idea of taking Men’s Wearhouse private and disagreed with the management’s plans to buy its longtime rival, Jos. A. Bank.
“I told them on the Joe Bank deal exactly what I thought,” Zimmer said. “I competed against Joe Bank for 43 years. They had a store in Houston in 1973 when we opened. It was one of 16. Now they have around 700.”
Zimmer said he was “thrown out” for being so vocal about his feelings.
At the time, the company said: “Our actions were not taken to hurt George Zimmer….Mr. 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. He 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.”
Zimmer now accuses the board members who fired him of looking out for their own jobs first.
“It’s not about nobility and morality. The board is making $300,000 to $400,000 each and they knew that I was unhappy and looking to take the company private and they knew that most of them would lose their jobs. What’s interesting is that they didn’t give a damn about the shareholders and investors when they fired me. It’s blown up in their face now,” said the man who fronted the retailer’s ad campaign for years, pronouncing in his gravelly voice, “You’re going to like the way you look. I guarantee it.”
There have been some efforts by various board members to patch things up with Zimmer in what by all accounts was a series of close relationships among the company’s leaders, but they haven’t gone anywhere with him. Zimmer said former board member Deepak Chopra reached out to see if they could reconnect. But Zimmer said he told the spiritualist — maybe in the next life.
Zimmer said if he had stayed at the company, “I would be freaked out” by the performance of Jos. A. Bank. “They are probably besides themselves, and now they’re trapped. People don’t admit their mistakes and they’re not going to say, ‘I think we made a mistake getting rid of George to help us work through this problem.’ They’re never going to say that.”
Even so, Zimmer retains affection for the company and is ready to serve — if the call came.
“I would consider working with them again, but I don’t think they would consider working with me,” he said.
Doug Ewert, current ceo of Men’s Wearhouse, did not respond to a request for comment.
Zimmer would also consider working with an outside party to buy the company, but said he has not been approached.
“But I’m open to anything at any time,” he said. “I don’t rule anything out.”
While the stock price has dropped precipitously, Men’s Wearhouse also now has a significant debt burden due to the Jos. A. Bank deal. “It’s not quite a steal,” he said. “When I wanted to take it private, it had zero debt and Wall Street used to make fun of me. My successors have now borrowed $1.8 billion to make the acquisition and they still have that debt so it’s not quite the private equity steal.”
If he were lured back, though, he said the deal would have to be a good one. “I have my own company now.”
That company is Generation Tux, an online suit and tuxedo rental business. Zimmer also owns Z Tailors, an on-demand personal tailoring service.
Zimmer was in New York to promote his partnership with ESPN, a role that brought him to the New York Stock Exchange to ring the opening bell — in a tuxedo, of course — on Tuesday. Generation Tux has created four tuxedos, designed by Zimmer, for the teams participating in the College Football Playoff Semifinals on New Year’s Eve: Clemson University vs. University of Alabama; and Michigan State University vs. University of Oklahoma. Zimmer will be back in New York on New Year’s Eve to marry America’s Official First Couple in Times Square, using his credentials with the Universal Life Church. Two couples are vying for the honor and the winner will receive a weeklong honeymoon in Cancún, Mexico.
Zimmer’s association with ESPN also brought his voice back to the airwaves. He filmed a series of commercials promoting the college football playoffs for the sports network that are currently running online but may be on television eventually.
“I’m a ham,” Zimmer said. “This is my element.”