Men's Wearhouse: George Zimmer (2019)

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in the last year alone. So look for that later this week. And for today's show, we're sharing an episode from April of twenty nineteen with a guest who has an amazing story and a truly Amazing voice. Enjoy. Oh.

I knew that something wasn't right. And the next day, they said that by unanimous consent, they decided to replace me and George. We've put your furniture and storage. And I remember thinking

my furniture and my knick-knacks, 40 years. Of stuff that I had accumulated. and fifty cartons. We're put in storage. And in the moment it felt like

Well damn if all these people Who are my friends? Don't want me as their leader anymore. Then why do I want to be Their leader.

Welcome to How I Built This, a show about innovators, entrepreneurs, idealists, and the stories behind the movements. They built. I'm Guy Raz, and on today's show, how George Zimmer turned discount suits into a multi-billion dollar empire called Men's Warehouse. and the bitter battle that forced him. To give it up.

So in retail fashion, there are three main categories of customers, and obviously this is a slight oversimplification, but it goes a little like this. There are products for the top end of the market, so think like a Birkin bag by Airmez. It costs around$20,000, and Airmaze knows it's only gonna sell a small number of them a year. You sell five hundred Birkin bags a year, that's ten million dollars in revenue. And then there's the lower end, so Old Navy for example. A huge number of consumers can afford to buy their clothes, and so they sell a lot of stuff. T shirts, jeans, button downs for like

twenty or thirty bucks apiece. And there is a clear strategy with each approach. But where fashion brands can really hit the big time. is in the middle range. So imagine a Venn diagram of a person who might pop into J. Crew or Maidwell now and again. But also pick a few things up at Target.

That is the customer most fashion brands hoping to attract, the value shopper who's also discerning. And while this all might sound intuitive and obvious. That wasn't always the case. If you wanted a suit, for example, in the 1960s or 70s, you had to shell out a lot of cash or settle for something that looked and felt. Well, cheap.

And this was the insight George Zimmer had back in the early seventies when he was a young suit salesman. A good suit was out of range for a lot of men. And by the way, George also thought with some justification that men generally hated shopping for clothes. And when they did, they wanted to do it once, maybe twice in a year. So what if there were a place that solved this problem? A place where you could get a pretty solid suit at a good price, but also a place that made it super easy to get in and out fast.

A place where, while you are trying on your suit, The salesperson would come back to the dressing room with a stack of handpicked button downs, ties, socks, and shoes. To go with that suit. and a place that would do all the alterations on site. This was the idea behind men's warehouse.

And what started out as a single shop in Houston. would eventually turn into a multi-billion dollar clothing empire with hundreds of stores across the US. George became the face of that empire. You probably remember those commercials of him back in the day. George would look at the camera and say, You like the way you look, I guarantee it. But over time, his personality, his charisma, his vision.

It created tension with the management and with the board. And as you will hear They threw him out. And it was ugly, but we'll get there. George Zimmer grew up in Scarsdale in New York.

His dad worked for a discount men's clothing company called Robert Hall, so obviously that had a huge influence on George. But it was his mom who really played an outsized role. in his early life. My mother. Was a

Truly remarkable woman. And she had both. Amazing. strengths and qualities. That made us all proud.

And then she had her own Demons. Many of them connected to having been an orphan which does carry Its own baggage.

But what she did for me Which is Something that I didn't appreciate. When she was alive. But what she instilled in me was

Was This notion That I was a Special boy. And I would be able to do

Anything I chose to do. in life and I must say I've been a legend in my own mind. For uh decades. And uh

As I think we all know now. Confidence is a positive quality. And I mean you say your mom instilled this idea in you that you were special.

Did you feel that when you were a kid? D was it something that because she said it, you started to believe that? The truth is that I did not But I think that Because of her Consistency in the way she

handled this issue. That it did uh Enter my subconscious. And by the time I got to college, And certainly after college.

I felt very uh confident about Almost anything I tried. So you in nineteen sixty six, you go off to college to Washington University in St. Louis. Um, what do you remember about Washington University

at the time. I mean this is like the height of The free speech movement at Berkeley and student activism and the anti war movement and what was it like at Wash U? Well, it was fantastic. I've

Often felt that the time that you spend in college. If you're fortunate enough. Positive.

years of your life. For me. I went to college. as a sheltered young Jewish boy from New York. And uh because of what was going on in the streets.

I became Much more. politically aware. And uh sophisticated. So m okay, so you're at Wash U studying economics, I think, right? Right. And meantime, back in Scarsdale Your dad's business?

Making clothing. How was it doing? Well, when I went to college. His business. was in its ascendancy.

But He never really Mastered. The art of making a profit in business. Although he did make Small profits.

He never really In my opinion. What was what was your dad making? Inexpensive, boys. outerwear like what we called

Snorkel jackets. Out here they would be called. Ski jackets, nylon. Shells. More of an upscale.

Boy's raincoat. And when John John Kennedy was standing at his father's funeral. And that

Famous photo where you're gonna be. Salutes. He's wearing my father's raincoat. Wow. Amazing. I mean I'm anyone listening can picture that image. That's right.

Um, presumably he was manufacturing all this In and around Scarsdale. This is like the pre make your stuff in China era. Asking me in uh Late seventy one. Since I had not gotten a job of any note.

I was substitute teaching. And uh my father I think recognizing His son was in danger of Drifting away.

to become a permanent Him. Why don't the two of us? Go to Asia.

Because he wanted to look into manufacturing there instead of the greater New York area. And when I came back to uh New York To make that trip.

He informed me that Something had come up and he couldn't do it. But he wanted me to go. in his stead, which I did. And uh

Really, that's the beginning of my business. Experience. So nineteen seventy one he says, Hey, I wanna think about making my stuff. In Asia can you go there? Where did you fly to?

Well I flew to Osaka was my first stop. And uh we get to uh What was known as Idlewild Airport back then. Right, J F. Right. It was called Idewil then. And um

It was Pan Am One. Flying from New York. Through Fairbanks, Alaska. To Tokyo. And then I was switching

And flying down to Osaka. All right, so you fly. You get to Osaka. By the way, what are you I mean, are you You're twenty three years old. Presentable

I was presentable. I told my father, uh, when he told me he wasn't making the trip that I didn't really understand his business well enough.

At which he said. Mm. George, they're gonna love you in Asia. Because you're my Eldest child.

Your number one son. And they're gonna love the fact. that you're doing this because I can't. So I would get up every morning At about five o'clock in the morning.

and start studying because I literally Didn't know. Much about the manufacturing. Of clothing and I would study from uh

usually five to eight including Going to the uh breakfast restaurant in the hotels. which were quite glamorous. And um

He was right. A lot of people We're very excited. to talk to The number one son.

who had made such a long trip because his father could make it. And you were there on a fact finding mission, right? You were looking for potential factories to work with. Yeah. My job. Was the fine. Factories.

Give them samples. Two Make. and then send them back to New York. And be sort of the middleman.

And he was making The decisions. Of course it was always about negotiating. The exact fabric and

I lived there for about six months. Oh wow. I ended up Settling. And Hong Kong So did you find a factory that you decided this is the one that's gonna work? No I did not. I found many

Factories that made samples. Which I dutifully uh sent back to New York. But uh We didn't find Any factory that we could make a deal with

And so after about six months I came home and uh When I got back to New York. It was the 72 presidential.

Election Hm. And I uh Actually got a job. in the McGovern campaign.

Working in Chicago. In the summer of seventy two, In charge of the what was called grassroots fundraising. And I remember I moved to Texas on election day.

Nineteen seventy two. Why? My father offered me a job. In Dallas. Repping his line.

In Texas, Oklahoma. Louisiana. So you get back to the US, you work on the McGovern campaign for a brief stint. Yeah. And then your dad sends you to Dallas to represent

him and his clothing company. But why Dallas? What I mean The uh The rep he had there had quit. So he had reps all over the country? He did. And they were the what uh they would what would they do? Go to department stores or small shops? Department stores. Specialty stores. By this time he had a

Thriving business. And uh he was doing well. And I thought it was an opportunity to Continue my

Apparel career. And I like living. In Dallas. It was um It was fun. So you moved to Dallas in seventy two, and what you start Going uh making appointments and trying to

To say, Hey, you know, this is the we were making these raincoats and these jackets and uh you know For six months. I traveled the uh territory. Texas, Oklahoma, Louisiana. And the largest account In my territory.

Was in Houston. Which is where I ultimately started men's warehouse. What was the account? Called Foley's. It was a uh Federated department store. And I went in and sold

The boys buyer. Some sport coats. That were Not in my opinion. the correct sport codes bought.

But I was too new in the job. And let him make the order because it was in order. And then when they didn't sell He told me that

That he knew my father was the owner. And he'd like to return the coats. And I said, Well We don't take anything back. And he reminded me that

that I could pick up the phone. And call my father. And get it done. Which I did. And we took back.

About four hundred Sport codes. And He'd promise that he would give me a Large order going forward.

And when I came in to get that order, A few months later. Mm-hmm. So I had about a five hour drive. From Houston back to Dallas.

And um I decided that they didn't really understand. how to retail. Apparel not only in folies, but

But throughout my territory. I didn't think that they understood that The idea of discounting. Which was really more in the northeast.

And to some degree in uh Chicago. but had not gotten into the south. And so uh I decided to uh relocate from Dallas to Houston. And open the first men's warehouse.

Wait, well let me let me wind this back a little bit.'Cause it can't have been that quick. Or maybe it was. I mean you are Your dad's rep in Dallas. And

You lose an account. And At some point you say You know what? I wanna open up my own I'll tell you the the uh

Having been a student activist in college. And uh having been somebody that did not believe that capitalism was the uh end all be all. To uh

What we needed. I did not like the idea. Love. Having to execute. Not just my father.

But the sales managers Vision. And so the reason I The primary reason I opened men's warehouse.

was that. That it was a way for me. To become My own boss. Um

Create my own destiny. Follow my dreams. Okay, so you are roughly twenty five. And what's the Younger, okay. And before you even opened up Men's warehouse, what was your idea? Why did you think that suits was the right thing to get into? Well suits was what I knew. But how was it that you knew suits? I mean, was'cause I my understanding is that your dad's primary business was making clothing for boys.

Mm He had expanded so that his product assortments could We're uh outerwear like snorkel jackets. These uh

Raincoats that had zip out linings that were fairly upscale. And then he started a line. Of inexpensive

Suits and sport coats. And did you wear suits yourself? I almost never wore a suit. Until I went to Hong Kong. And why did you think that Houston was the place to go? Yeah.

Well I was living in Dallas. And going to Houston. Every month. And the way I explain this. Is that

Dallas was old money. Houston was new mom. So that For a young upstart. Like myself.

trying to uh create a business. The chances were much greater in Houston. And in fact, uh Since I didn't really know anything about the retail business when I opened

men's warehouse. that I was able to make it. Was'cause the city's growth That it.

Covered up for the What I didn't understand. Okay. So you decide you are going to open up A store.

That sells discount Suits. In Houston, in nineteen seventy three, Did you start the company by yourself or did you do it with somebody else? Well no, I the way I d I started it was Harry Levy had been my

Fraternity, brother. And uh was from Dallas. And I had called him up and said Would you like to move to Houston? And do this with me.

And he said, Well what's in it for me? And I said, Well I give you A third of the company. For three grand. Uh so I got my inventory From my father he became

My financial partner. And the inventory wasn't suits, it was just slacks and shirts and jackets. Oh. That uh I had only seven thousand dollars. when this all began. And that basically went to first and last month's rent. So there was really no money.

as the company got ready to open. My father sent us. Several thousand. Suits and sport coats. And slacks.

As well as A B Raw steel. Rolling racks. Which is what we used.

First store fixtures in the first store. How big was that place? It was six thousand feet. So big place. Yes. Rent in Houston was it cheap? Well it was uh thirty five hundred a month. Got it. Nineteen seventy three. Uh you and Harry opened the store men's warehouse. Uh how to go.

Well I remember The first Saturday we were open. For business. We ran in ahead. In the uh Houston Chronicle.

And in the Houston Post. We were selling. Sport codes for$25. Slacks for ten dollars. and did not carry suits.

Or shirts. Or ties. Or have tailoring, in fact. Our first Cash register.

Was a mechanical Old style NCR. That you would push the buttons. And it would come up in the window. Yeah. No sale. I mean that was how we started.

And uh w was it a hit right away? Well we did three thousand the first. Saturday. And then Monday we did sixty dollars. And so I would not say

It was a success right away. Wow, were you guys freaking out about that Monday? No. Because my mother had always promised me That these things would work.

So you uh you guys are running this place and uh Doesn't sound like it was pr I mean, aside from that first day, it doesn't sound like you guys were really breaking the bank, you know, doing You know, Just crushing it in those first uh two years. We weren't um

We lost money in uh each of the first two years and then We opened a second and a third store in Houston Houston. But ha wh explain this to me. You're losing money on the first store But you go and you decide to open a second and a third store thinking that those will help you make more money? the marketing expenses.

In a major Urban area. are so high you can't really run. A single location. You need multiple locations. When did you expand into jackets into s uh ties and suits and belts and things like that?

We started to get into A broader product assortment. in the mid to late seventies. We first went right to suits. And we had a salesperson. He was the uh

EVP For uh Hard Shafter and Marks. Based in Chicago. And uh he came to see us.

And I said to him They had the line Nino Saruti. And I said, we'd like to buy that line from you. And he said, forget about it, I sell.

Fall these I thou And I said, Well let me tell you the whole story. We want to buy the line. Without the label. But we want a twenty percent.

Discount. So it'd be a white labeled men's warehouse. Nino Saruti suit, but you would put your label on it. Correct. And he said He said Why would I do that?

And I said, You know, Kenny Why don't we play a game? of uh basketball. And if I can beat you. You'll give me that deal.

And if you be me I won't bother you again. Hm. The rest is history. You beat him in the game. I beat him and we got

Nino Saruti suits. White labeled. But out of twenty percent. purchase discount. Which enabled us

To sell them. moderately profitably. At 199. When everybody else in America We're selling them at$299.

That was the essence of the business. So I guess there's a way for our Schaffner and Marks or or any of the the clothing manufacturers to sell more of their suits. If they white labeled them. Even if they were selling to you at a lower price. Exactly. When did you first expand outside of Houston?

Uh In nineteen eighty I came out to the Bay Area. On a vacation. And we were planning on opening up. in Dallas as our

Next Market. And I walk into uh either Ruth Atkins or uh Some other Bay Area.

Store. Department store. No, it was a men's men's store, okay. Uh clothing store. And there was not a regular priced. A hundred percent. Whoa.

Suit. For under Three hundred dollars. And we were selling Hundred percent wool suits.

For one ninety nine. So I went back to Told my team that We could pick up Dallas.

Later. And we were gonna go right to the Bay Area. Before things changed. Where in the Bay Area? So we started In the South Bay, we opened in uh

Mountain view. San Jose. Fremont And then we had one store. Up in uh Concord. So this is in the early eighties. The tech boom is really

Just beginning. Presumably your customers were Uh professional men. Yes, mostly professional men. And you opened up there and uh

What happened? Did people flock to it or or was it kind of again, you know, mixed results? I would say mixed results. We were not really successful. Until

The mid eighties in my opinion. What happens in the mid eighties to Make Men's warehouse.

really successful. Well, we were uh put under Giraffe. Our bank. In uh taxis.

Cold hour loan. And so we were putting a uh Difficult position. No, it's uh In the early eighties.

There was a General meltdown. Of all the banks in Texas. And every bank Including.

which was the largest bank down there. First city national. All of them. By out of state banks.

Right. So we had to rethink our business model. So I looked at our inventory. And by then it was on computer.

Print outs. And I noticed That on about Half of the inventory. There was a significant

Discrepancy Between the ticketed price and And the selling price. Meaning meaning what? It was m the selling price was much lower than what the ticket price was? Yes, because of promotional activities.

Correct. And you had regular sales? We did. So I made the decision. Two

Change the model. And Eliminate. Regular sales. We need to stop holding sales.

lower our everyday prices and basically send out the message that we just uh that we offer Low everyday prices. Exactly. When you made the decision. Did you have a year of Slow sales two years.

I mean it sounds like it was You have a combination of a bank calling and your loan. Really low margins. Sounds like this change in strategy. was kind of a Hail Mary.

Well, I think the toughest part of this. What Trying to persuade people. That I knew what I was doing. Because they were questioning

Whether I knew what I was doing. But how did you know that you knew what you were doing? I didn't. So to that degree. You could call it a Hail Mary. But I had been in the retail business. For a while by then.

And I had uh Instincts that this Made sense. It made no sense to me. This constant

Garage. of sales. It was though Everybody in retail. Thought that the American

was stupid. And actually They're not as stupid. as those people thought. When we come back.

Just a moment. George Zimmer's Hail Mary paid off in a big way. And the origins That iconic slogan. You're gonna like the way you look. I guarantee it.

Stay with us. I'm Guy Raz and you're listening to How I Built This. Welcome back to how I built this. So it's nineteen eighty six and men's warehouses trying to pull out of an economic slump. George Zimmer has just changed the business model to focus on everyday low prices.

And to get the message out, he decides to become the spokesperson you know the commercials at the men's warehouse, you get all three. Service. Quality. And a good price. With George standing in front of what looks like a classroom. So what I did, because we had had training classes.

which I would give a presentation to. I found I was very comfortable in those environments. Sure. So I said Set up a fake training class. and bring in three cameras. And film me.

From different angles. And we will just Bring in random office employees to ask me questions. I will answer them. Saying what? Saying that we've got Great suits and sport coats.

Here's why And oh by the way They're priced right. And why did you think that would be compelling? I mean that sounds like the most boring, dull commercial ever. To my mother's

Words. It never occurred to me that And I could say this About Two dozen.

Things in my life. Then most people would say Didn't it occur to you that that might not work? And I go Quite frankly,

Not really. So at what point did you utter the very famous Phrase. I think I uttered it in eighty six. And uh how did that happen? It happened as an ad lib.

And um as I was adliving the commercial I'm having an inner dialogue with myself while I'm Speaking, I didn't have much time. Since I was in a Live recording.

And all I could think of was I guarantee. And the beauty of I guarantee it was that Not so much the words.

as hackneyed as you're gonna find. Yeah. But I when I started walking around in my regular life. People were saying to me. Hey George. I guarantee.

And I knew A That that's But I also have known something else. Which is

As long as people are calling me George. I think the companies that I'm involved with Will prosper. If they start to call me Mr. Zimmer. I'll be worried. So you essentially almost overnight become like the mascot of men's warehouse.

I did. And it it the benefit is That when you are a spokesperson For your own business. Of course you're doing it.

to affect the external world you want more business. But what happens Is that and we were in a retail business.

with hundreds or thousands of employees. The workforce Loves the fact. That the boss Is on TV.

I know. I know George. I know George, yeah. And uh It was a great uh Part of the company culture.

So by the late eighties you are still in Houston and the South Bay? No, we're in we have uh fifteen stores in the Bay Area. We're in Seattle, Portland. Dallas, Sacramento. And Houston. Yeah.

And what I'm still trying to figure out is why didn't a bigger company try and undercut you? I mean Clearly you've got this thing going where you're selling Nino Saruti suits. People it would be probably an open secret. that you were selling them for a hundred dollars less than a branded Nino Saruti suit. Without the label. Without the label, but if this was an open secret, why wouldn't some other company come in and like Macy's or some big company and try to do the same thing? Well, I I think that the answer is That many did.

There were people that tried to mimic what we did. But you know, part of it is And I'm very uh proud of this. I did uh all the training originally at men's.

And I used to say to uh our employees But men look at going into a clothing store. Like going to the dentist's office. So their wife says to them I made you a dental appointment.

And it's like the worst thing. that the man can imagine. So they put off. Coming in. to a clothing store.

Until they can no longer Defer it any longer. and from that intuitive uh understanding. We developed what we call Shirt stacking.

So that when a man Purchased a suit. While he was in the dressing room. We would put together Shirts, ties, belts, shoes.

Everything that would make. The outfit really jump. Then we would present it to the customer. And We were not.

In my mind. Pushy. But we were Not passive salespeople either. And the result was

That our customers thought We had great service because they perceived this. As service. And it drove a lot of revenue. So basically men, the thinking was, men don't want to spend a whole lot of time shopping. They're generally buying stuff when they have to. They're gonna go in, they're gonna try on the suit and the and the pants, but while they're in the dressing room, we're gonna bring them like a pink shirt and a blue and a white shirt, and we're gonna say, hey, these look great with this suit. Here's some great ties.

And And they would say, Thank you for making it easy for me, I'm gonna buy, I'll take it all, and they'd walk out. Exactly. Wow. So nineteen ninety two You guys go public and I guess the IPO brings in

I read like thirteen million dollars. That's correct. It doesn't sound like a whole lot for uh an IPO. Well I was never Trying. To a mass. The greatest fortune.

Then I could. And uh It turns out to have been I think a very

Although we had an IPO that only raised Thirteen million. We then had four or five secondaries. Each secondary Was that a higher

Value. Secondary stock offering. They're kind of like IPOs. I think the nineteen nineties really was when you blow up, right? That's right. You're riding a really strong economy. What else is going on? Why I mean,'cause you now are going to cities all across the United States, right? Right. So what's going on that allows this expansion? Wha are are consumer habits changing? No, I mean first of all

With the money that we got from the uh IPO and secondaries. We started opening fifty stores a year. Or a store every week.

So if you can imagine each store costs about a million dollars. in uh inventory. All across the country. Right. All fifty states.

You hit I think a billion dollars in revenue in ninety eight. And then in the early two thousands the expansion continues, nineteen ninety nine, you start to rent out tuxedos. How did that happen? Wha and why? So at we were at a training class. One of my uh regional managers had dinner with me and said

You know, George uh I went into a few Tuxedo stores he was in Seattle. And uh he said You know This is exactly what we do.

Fit people in clothing. Why don't we do this? And you said, let's try. And he had uh twelve stores up there. And uh the first year We did one million dollars. Wait, hold on. He he opened like a mini tuxedo rental shop within the store? Inside the store.

Exactly. Hated this idea. You lose. A customer. You know.

This is not a way to build a clothing business. So We rolled it out into our stores. A third A third a third over three years.

It took five years. before the employees in the company Stop complaining to me, but And I used to say to everybody

And it was it it got to be uh redundant where I I would say Hey look. This is Going to take a while.

But when it does. It's going to be amazing, hmm. And I guess there was a point I I I read that something like one out of five suits in America was purchased at men's warehouse. Correct. That is astounding. So I'm gonna fast forward to one

You step down as CEO of Men's Warehouse and Doug Uart becomes the new CEO. And you picked Doug Uir, right? I did. I I I had been You know, I didn't want to retire. Uh, and Doug had been my uh COO.

And they've been doing a great job. So I said to him, You know, Doug. Our offices were next door. I said uh I'm not retiring, I'm gonna come to work every day. Yeah.

But you're running things day to day. And I'd like you to uh Get credit for that. You then uh become what chairman of the board? Well I had been chairman. Right. I became executive chairman. To indicate that I was still working.

Just just a a reality check. After you made that decision to step out away from being CEO, Did you really disengage? I mean it was your company. You founded it, you started it. Did you really back away? Uh, I never told Doug what to do. After he was made CEO, I said to him, Doug.

You're the CEO. It's your decision. You make it the way you see it. Okay now. This is a moment where I guess

There begins to be considerable tension between you and the board. What kind of sort of differences of opinion did you start to have with board members? I I don't really know exactly what happened because As it got closer to my uh

I was cut out of more and more of the discussions that the board was having. But I'll give you a simple example. We owned a division called KG. And K Did four hundred million.

We had a hundred stores. And It was a Superstore in the sense that it was twenty five thousand feet.

And it was men's and women's And the price points were below. Men's warehouse. And I said to the board. KG provides a unique opportunity.

For an offense of And defensive strategy. And they didn't quite understand what that meant. And so what it means is Men's warehouse stores.

We're able to raise The gross Profit percentage. By a full ten percent. Which is a thousand basis points.

Over a decade. Because K our opening price point position.

And at the same time. Because K and G was a significant national presence. It prevented the

Other stores. from realizing That Investing. In low price clothing.

The way I had done in seventy three. Would make sense. So The board and dug. Wanted to sell KG.

And I told him that I would support them in selling it. But I didn't agree with it. So it was that type of decision. And the board represented it.

in their public relations releases. As though I was unwilling to And I never understood what they were talking about.'Cause I was

Totally explicit. And uh Explaining the dog. That he was the guy. Alright, June 19th, 2013. Yes.

You're fired from men's warehouse as the executive chairman. Yeah. This is the company that you founded. In Huston in Ny three. What do you remember about hearing that news?

Well, it wasn't that long ago, so I remember everything. I remember That the lead director. who I had put in the position. Six foot seven.

Stood up. Which made him quite intimidating. And said to me You know, towards the board by unanimous consent. And uh

went on to talk about getting rid of me. But it when he said unanimous consent. I'm in a room of friends. And I'm going Unanimous.

mean I have Deepak Chopra. as well as People that's going to be a little bit more. You don't know. And I can't believe

That it is unanimous. 'Cause I have done so many Favors for all of these people. Well at first they said to me. We'd like you to become

Chairman Emeritus. And I said. What is that? And they explained it. And it was a figurehead position. And I said, when do you need to know?

And they said by ten o'clock. And the reason why was that we were meeting as a board. in advance of a annual shareholder meeting. And so they wanted to uh get me off the perspectives as chairman of the board.

And they said they could do it. if I notified them by ten o'clock that night. So we were in a hotel. So I was just by myself in a hotel. Where? Uh in free mind. Mm-hmm.

And um I remember Being in my room and thinking You know, my lawyer was the company's lawyer. I had

Very few good friends. Outside of the business. I And nobody to really talk to you. Deep came up to my room that night.

And uh led me on a guided Meditation. Because he was concerned. That I wasn't Taking into account my legacy.

And he was right, I wasn't valuing my legacy. Uh and and what I was valuing was Two things I said Look. I know I told you that Doug

would be a good replacement. But after a couple of years. I was wrong. He's not qualified to run the company.

And that wasn't what Deepak wanted to hear. And so the next day they said that, you know By unanimous consent, Ava. decided to replace me, and they said to me, And George.

We've put your Furniture and storage. And I remember thinking, you've put my furniture in storage. I mean, my furniture and my knickknacks, 40 years.

And fifty cartons. We're put in storage. And in the moment it felt like Well damn if all these people Who are my friends?

Don't want me as their leader anymore. Then why do I want to be Their leader. Obviously there's something not right here. When we come back in just a moment.

How after leaving Men's Warehouse, George stops and smells the roses in his backyard for a few months. Gets really bored. And decides to start another clothing company. Stay with us, I'm Guy Roz, and you're listening to How I Built This. Hey, welcome back to How I Built This. I'm Guy Raz.

So it's twenty thirteen and every single member of the board at Men's Warehouse has just voted to fire George Zimmer. From the company he founded. Were you hurt by by the bo the board set to you by by your friends Essentially rejecting you to

Did you feel personally Park. Well, I I I and this may not be a satisfactory answer. But it may be more about That as a uh

Train CEO. I don't get hurt. The way you mean it. So in no way did it depress you? But I did not get depressed.

I did not go into this Poor me and I'm a victim. The subtitle of my book. Is how overcoming obstacles. became a habit.

Uh I am completely comfortable. In my skin. Almost all the time. And uh

I feel I have a lot of respect. From uh Uh people I care about. I see what happened at men's

Of uh Capitalism run amuck. Not a one. So so so to say you didn't take it personally is not really true. Oh well if

I I feel Then I'm a great friend. And so When you Hurt me.

The only way I have To Get even. is to withhold my friendship. And say, That's it.

We're no longer friends. And I no longer want to speak to you. That's a normal human reaction. Yeah. Now it could be that

You know, under some sort of Therapy, it would be discovered that I am really quite Hurt? But

I don't feel hurt. I um I got divorced after This happened. For the second time.

I have a great relationship with my Children, um I'm uh, you know, watching politics in the evenings, uh But I I don't feel I don't know. I think

Being hurt. Is Very close. To feeling like a victim. And I just

Reject that. Okay, so After you left it cleared the way for Men's Warehouse to make a couple of significant decisions, including acquiring Joseph A Bank for one point eight. billion dollars turned out to be a bad decision.

And the reason is Because Men's warehouse. Thought that the Joe Bank Customer in the men's warehouse.

Because Of shirt stacking. We were More aggressive.

in the selling process. When you walk into a Joseph Bank They leave you alone. And what I found was

That You Do a lot less business. With that strategy. Then if you have

a knowledgeable Who is Genuinely interested. and helping the customer in whatever the customer's lifestyle is.

Um the company is How would you describe the company today from the outside? Struggling. Do you own any shares? A few. Yeah. And do you feel a sense of satisfaction that they are struggling since your departure?

Yes, and my new business. Is uh Although we're very small relative to them. We are competitors. So so I wanna talk about your new business a sec, but

You leave men's warehouse. You're rich, you can do whatever you want. You can Go to Hawaii, you can Uh hang out with your kids, where wherever you want to do. Right.

Uh did you think about that doing that for some time? I sat in my backyard. In Piedmont, beautiful. Flowers. It was the summer.

And uh I thought, gee, this is Dull and boring. My kids are in school. My wife's got her own life, and I'm sitting in my backyard looking at the flowers.

Didn't make sense. So I I guess Pretty soon after this, you come up with an idea for A new business which was an online tuxedo rental company called Generation Tucs. And you launched this in I think what September of twenty fifteen? Right. And when the people from Men's Warehouse found out about it,

Uh w w what did they think? Did they was there like a cease and desist letter? I guess I guess you didn't sign anything'cause you write you didn't pledge out. But you didn't pledge not to kill you. You know what men's has done. Men's is afraid of me is what it must be. Because after I was fired.

The first thing I tried to do was was by K G from men. Which was that retail company that they own. You try to buy it from them. For ninety million dollars. Okay. Well at first They wouldn't sell it to me at all. Then they said, All right.

If you give us a four year Non solicitation. And I said, what do you mean by that? And they said you can't hire our employees. Yeah. For four years.

And I said. Are you kidding? I'll give you two years. But four years is an eternity.

Yeah. Deal never happened. To this day. They still can't find anybody. that would offer'em.

half of what I was gonna pay'em. That I Had a relationship. With Macy's. And we were gonna provide Macy's

With the Tailoring For there. online business. Not their stores.

Their online business. And as a lark. I asked my local guy. If they would have any interest. And

doing a tuxedo rental thing with us. Yeah. And within A few months. My team and I were in New York.

Yeah. Terry uh Lundgren's office. The CEO of Macy's. Making a deal.

To be the Tuxedo. rental And we had the deal. It went to legal review. And while it was in legal review.

Men's warehouse stole it. Because I To agree to a no-sharp clause. Uh-huh. So they shopped it around.

But the next thing I know Terry called me and said I'm very sorry, George, but But we're not doing it. Who are you doing it with?

And he said, Uh He didn't want to tell me at first. And then he said, Men's warehouse. And I went You gotta be kidding me. Yeah. And um

It doesn't make me uh vengeful or Revengeful it. It just makes me More determined.

to do what I know how to do. What is the status of generation tucks now? I mean you started in twenty fifteen. It took you a little bit. Okay, so it started took a long time for men's warehouse to get to well, to really get to major problems. Much better. And uh You go online and you b get a tux and you just

put your measurements in and it comes to you and then you wear it and you send it back. Exactly. And we do things like If you want a uh Free home try on.

We'll do not only one Two. Free home dry ons. We do freeze watches. You know, we do a lot of things that make our business uh

Strong and it's Right now it's starting to really Fire on all cylinders. George, do you feel a sense of I don't know, vindication.

That you were right. about certain things. Certainly we're wrong about certain things. Everyone's wrong over the course of their career. But I guess you were right in in certain ways. You you did not want Men's Warehouse to acquire Joseph A. Bank. You didn't like that model. They did.

It hurt them. Uh Does being right is that important to you? I think so. Why?

Well, I like to think that I'm right about Many things. And wrong about a few things. But um Yeah, I think that uh you know.

that there is a uh a real problem in America. I think that capitalism Which clearly won the uh battle over communism. And even socialism.

is need in need. A modification. And I'm a capitalist. What the hell? I've spent my life making money. But there are a few adjustments. to capitalism.

That would make it sustainable, which unfortunately I don't think it is sustainable. Would one of those adjustments be M shifting the focus away from shareholders. Exactly. That's what it's about.

'Cause it's always about short term profit. Yeah. George, when you when you look over the course of your career Uh the ups and downs. How much of your success do you attribute to

Your hard work and your intelligence. And skill and how much do you tribute to Luck, just being lucky, riding a lucky wave. Well I think they go hand in hand. In other words.

I think you need luck. But You also need The talent And the uh intelligence.

Two know how to take advantage. Of luck. I think that what happens in life, unfortunately, is Is

A lot of people have the opportunity To be lucky. but don't know how to take advantage of it. And you did. And I did.

That's George Zimmer. Founder and former CEO. of men's warehouse. By the way, the company that now owns Men's Warehouse, Tailored Brands. was hit hard during the pandemic and filed for bankruptcy two years ago. It's closed hundreds of stores but hopes to reinvent its business model and stay in business.

Meanwhile, George is still running the two other companies he founded, Generation Tucks and Z Tailors. At some point I'm gonna make you say it. You know that, right? I'll say it right now. You're gonna like the way you look. I guarantee it.

I think I'm gonna put that as my phone ringer. When I was uh At Men's Warehouse. I would go to uh Charity auctions. An auction off doing that.

For thirty five hundred dollars. Wow. I would do it for you for nothing, by the way. So Thank you. Thank you very much. Hey, thanks so much for listening to the show this week. If you want to contact the team, our email address is hibt at id.wondery.com. On Twitter, we're at how I built this and I'm at guy Roz. On Instagram, we're at how I built this and I'm at guy.

Guy dot Raz. This episode was produced by Deba Motosha with music composed by Ramteen Arablui. It was edited by Neva Grant with research help from Candace Lem. Our production staff also includes JC Howard, Casey Herman, Liz Metzger, Carrie Thompson, Alex Chung. Josh Lash, Sam Paulson, Katherine Cypher, Elaine Coates, John Isabella, Chris Masini and Carla Esteves.

I'm Guy Raz and you've been listening. to how I built this.

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