Men's Wearhouse: George Zimmer

Automatic TRANSCRIPT

Support for this podcast and the following message. Come from Fidelity Investments, taking a personalized approach to helping you grow and protect your wealth. Learn more at fidelity dot com slash wealth. Fidelity brokerage is services LLC. So really quick before we start the show. I want to tell you about a live event. We are about to do in Portland Oregon on Thursday may sixteenth. I'll be talking with Seth Tibbett. He's the founder and CEO of tofurkey. The show is supported by American Express and our other live events have sold out fast. So to get tickets, go to NPR presents dot org. That's may sixteenth in Portland, Oregon. You can also follow how I built this on Twitter and Facebook to be the first to know about our live shows and hope to see you in Portland. I knew that something wasn't right. And the next day they said by inanimate consent. They decided to replace me and George we've put your furniture in storage. And I remember thinking my furniture, and my knickknacks forty years of stuff that I had accumulated in fifty cartons were put in storage. And in the moment it felt like while Dan of all these people who are my friends don't want me as their leader anymore than why do I want to be their leader? Rahman? He are how I build this a show of that innovators. Entrepreneurs idealists stories behind the movements. They built. I'm guy rise and today show, how George Zimmer turn 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 over simplification. But it goes a little like this. There are products for the top end of the market. So think like a Birkin bag by air mass. It costs around twenty thousand dollars an air. Maze knows it's only going to sell a small number of them a year you sell five hundred Birkin bags ear. 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 a piece, and there is a clear strategy with each approach, but we're fashion brands can really hit the big time is in the middle range. So imagine of diagram of a person who might pop into J crew or made well now and again, but also. Pick a few things up at target that is the customer, most fashioned brands are hoping to attract the value shopper, who's also discerning. And while this might sound intuitive and obvious that wasn't always the case. If you wanted a suit, for example, in the nineteen sixties or seventies 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 solve 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. Trying on your suit the sales person would come back to the dressing room with a stack of hand-picked button downs ties socks and shoes to go with that suit and a place that would do all the alterations onsite. This was the idea behind men's warehouse in what started out as a single shop in Houston would eventually turned into a 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. Jordan would look at the camera and say 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 for 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 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 decades. And as winning. We all know now confidence is a positive quality. And I mean, you say your mom and still decided knew that you are special. Did you feel that when you were a kid 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 enter my subconscious, and by the time, I got to college, and certainly after college I felt very confident about almost anything. I tried see you in nineteen sixty six he go off to college to Washington University in sT Louis, 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 antiwar 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 can be the most positive years of your life for me. I went to college as a sheltered young Jewish boy from New York, and because of what was going on in the streets. I became much more of a sophisticated and politically aware person. Okay. So you're at wash U studying economics. Thank right, right. And meantime, back in scarsdale your dad's business making clothing. How is it doing? Well, when I went to college his business was in it's 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 took advantage of what he might have been able to achieve. What was what was your dad making close? Was he making inexpensive boys outerwear, like what we called snorkel jackets out here. They would be called ski jackets nylon shells. Yeah. You also made more of an upscale boys raincoat. And when John John Kennedy was standing at his father's funeral in that famous photo. Onery salutes. He's wearing my father's Ranko. Wow. Amazing. Anyone listening can picture that image? That's right. Presumably he was manufacturing all this in and around scarsdale. This is like the pre make your stuff in China era. Right. Well, he ended up asking me in late seventy one since I had not gotten a job of any note. I was substitute teaching and my father, I think recognizing his son was in danger of drifting away to become a permanent hippy said to me, 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 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 stat, which I did and. Really? That's the beginning of my business experience, so nineteen seventy-one. He says, hey, I want to think about making my stuff in Asia. Can you go there where did you fly to why flew to Sokha was my first stop, and we get to what was known as Idyllwild airport back. Then right JFK, right. Who was called Idyllwild then and it was paying him one flying from New York through Fairbanks Alaska to Tokyo. And then I was switching and flying down. Whoa, sokha. All right. So you fly from New York via Fairbanks in Tokyo. You get to Asaka, by the way. What are you being are you you're twenty three years old? And and were you like a presentable were you, you know, I was presentable I told my father when he told me he wasn't. Making the trip that I didn't really understand his business. Well, enough to do this on my own at which he said, 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 usually five to eight including going to the breakfast restaurant in the towels, which were quite glamorous. And he was right. A lot of people were 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 to make right? And then send them back to New York. And be sort of the middleman got any. He was making the decisions. Of course. It was always about negotiating a price. The exact fabric. And I lived there for about six months. I ended up settling in 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 do to flee sent back to New York. But we didn't find any factory that we could make a deal with. And so after about six months, I came home, and when I got back to New York, it was the seventy two presidential election. And I actually got a job in the McGovern campaign working in Chicago in the summer of seventy two in charge. Oh, what was called grassroots fund raising? And I remember I moved to Texas on election day nineteen seventy-two. Why? My father offered me a job in Dallas, wrapping his line in Texas. Oklahoma, louisiana. So you get back to the US you work on the McGovern campaign for a brief stint. And then your dad sends you to Dallas to represent him and his clothing company. But why Dallas what goes the the rep he had their had quit. So he had reps all over the country. He did. And they were what they would. What would they do good department stores form and in stores specialty stores by this time? He had a thriving business and he was doing well. And I thought it was an opportunity to continue my apparel career. And I liked living in Dallas. It was it was fun. So you moved to Dallas in seventy two, and what you start going to make an appointments and tried to to say, hey, you know, this. We're making these raincoats these jackets, and, you know, I six months, okay? I traveled the territory. Ori, Texas, Oklahoma, Louisiana and the largest account in my territory was in Houston, which is where I ultimately started menswear. What was the account called Foley's? It was a Federated Department store. And I went in and sold the boys buyer, some sport coats, that were not in my opinion. The correct sportcoats should bought when I was to noon the job to speak up and let them make the order because it was an water. Sure. And then when they didn't sell he told me 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 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 coats, and he promised that he would give me a large order going forward. And when I came in to get that order a few months later informed me that they were dropping. So I had about a five hour drive from Houston back to dowels. And I decided that they didn't really understand how to retail apparel, not only in Foley's. But throughout my territory, I didn't think that they understood the idea of discounting which was really more in the northeast and to some degree in Chicago, but had not gotten into the south. And so I decided to relocate from Dallas to Houston and open the first men's warehouse. All right, wait. Oh, let me let me one this back. Yeah. Quick. Or maybe it was I I'm really I mean, you are your dad's rep in Dallas for six months or six months, and you lose an account, and at some point you say, you know, what I want to open up my own place. How how did that happen? How did it? I DEA even come to you, you the having been a student activist in college and having been somebody that did not believe that capitalism was the end all be all to what we needed. I did not like the idea of having to execute not does my father, but the sales managers vision, I always wanted to be able to have my own dreams and to follow my own dreams. And so the reason I the primary reason. I open men's warehouse was that that it was a way for me to become my own boss and create my own destiny. Follow my dreams. Okay. So you are roughly twenty five and one younger K 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 minor standings at your dad's primary business was making clothing for boys. It he had expanded. So that his product assortment s- were outerwear, like snorkel, jackets, these raincoats that had zip out linings that were fairly upscale. And then he started a line of inexpensive suits in sportcoats. Right. And did you wear? Suit yourself by almost never wore a sued until I went on Hong Kong. And why don't you think the Houston was the place to go? Yeah. While 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. So that for a young upstart like myself trying to create a business the chances were much greater in Houston. And in fact, since I didn't really know anything about the retail business when I open men's warehouse. The only reason that I was able to make it was because the city's growth was so extraordinary that it covered up for 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 started. It was Harry Levy had been my fraternity brother. And was from Dallas, and I had called him up and said would you like to move to us then and do this with me? And he said, what's in it for me? And I said, well, I'll give you a third of the company for three grand. Nice. And how did you guys get the money to to open up her store? So I got my inventory from my father. He became my financial partner in the inventory wasn't suits. It was just slacks and shirts that ran jackets. That's right. And the way that worked was that I had only seven thousand dollars when this all began and that basically win the 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, goats and slacks as. As well as eighty raw steel rolling racks, which is what we used for store fixtures in the fast store. How big was that place? It was six thousand feet, so big place. Yes. Rent in Houston with a cheap while it was thirty five hundred a month got it. All right. So nineteen Seventy-three you and Harry opened the store men's warehouse headache. Oh, well, I remember the first Saturday we were open for business. We ran an ad in the Houston chronicle and in the Houston post. We were selling sport coats for twenty five dollars slacks for ten dollars and did not carry suits or shirts or ties or f-. Tailoring fact, our first cash register was a mechanical old style and CR 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 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 by. Would you guys about that Monday? No. Because my mother had always promised me that these things would work. So you you guys are running this place and doesn't sound like it was pro. I mean decide 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 two years. We weren't we lost money in each of the first two years. And then we opened a second and third store knees Houston, but how what explain this to me you're losing money on the first store, but she go, and you decide to open a second and 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 and two ties, and suits and belts and things like that? We started to get into a broader product of sorts. Men in the mid to late seventies. We verse went right to suits. And we had a salesperson. He was the EV p for harsh after in marks based in Chicago. That was a what they were America's largest clothing manufacturer. And he came to see us, and I said to him they had the line. Nino cerruti. And I said we'd like to buy that line from you. And he said forget about it. I sell Foley's, I sell and I said, well, let me tell you the whole story. We wanna buy the line without the label. But we wanted twenty percent discount. So be a white labeled men's warehouse Nino Cerruti 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 basketball? And if I can beat you you'll give me that deal. And if you be me, I won't bother you again. The rest is history. You beat him in the game by beat him. And we got Nino Cerruti suits white label, but added twenty percent purchase discount which enabled us to sell them. Moderately profitably at one ninety nine when everybody else in America was selling them at two ninety nine. That was the essence of the business. So I guess there's a way for our chapter in March or any of the the clothing manufacturers to sell more their suits if they white labeled them, even if they were selling to a lower price. Exactly when did you first expand outside of Houston. 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 either rusada gins or some other bay area store department store. No, it was a men's men's store a clothing store. And there was not a regular priced honored percent wool suit for under three hundred dollars. And we were selling hundred percent wool suits for one ninety nine. So I went back to Houston and 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 open. Wind in Mountain View, San Jose, Fremont. And then we had one store up in concord. So this is in the early eighties. The tech boom is really just beginning. Presumably your customers were a professional men. Yes. Mostly professional men, and you opened up there, and 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 in till the mid eighties in my opinion. What happens in the mid eighties to make men's warehouse? Really successful. Well, we were put under duress. Our Bank in taxes called our loan. Then so we were put in a difficult position. They. Called your loan because they were getting worried about you know, it's a in the early eighties. There was a general meltdown of all the banks in taxes and every Bank, including our Bank, which was the largest Bank down there. First city national all of them were acquired by out of state, banks, right? So we had a rethink our business model. So I looked at our inventory and by then it was on computer printouts, and I noticed that on about half of the inventory. There was a significant discrepancy between the ticketed price and the selling price. Meaning meaning what was the selling price is much lower than what the ticket price was the ass because of promotional activities. In other words, you'd have a sale or correct and you had regular sales. We did. So I made the decision to change the model and eliminate regular sales. You you decide we need to stop holding sales lower. Art, everyday prices are basically send out the message that we just that we offer low everyday prices, exactly. Early. When you made the decision did you have a year of slow sales two years one year of slow sales. I mean, it sounds like it was you have a combination of a Bank calling in your loan, really low margins. Sounds like this change in strategy was kind of hail Mary. Well, I think the toughest part of this was trying to persuade people that I knew what I was doing. He goes 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 instincts that this made sense. It made no sense to me this constant barrage of sales. It was though everybody in retail thought that the American. Consumer was stupid. And actually, they're not as stupid as those people thought. When we come back in just a moment. A George Zimmerman hail Mary paid off in a big way and the origins that Connex Logan, you're gonna like the way you look. I guarantee you stay with us and guy Roz in. You're listening to how I built this from NPR. Hey, everyone just a quick thanks to one of our sponsors who helps make this podcast possible or two thousand nine nineteen nine how I built this lead sponsor campaign monitor ad campaign, monitor they took Email marketing and need it radically easy. So the big thinkers could focus on what they do. Best developing. Big ideas, choose from hundreds of professionally crafted templates and turnkey designs to create campaigns that get results the best part. They're dragging drop editor get the job done in record time. Try it for free at campaign, monitor dot com campaign, monitor make your emails and business unforgettable. Support. Also comes from luminary luminary is a free new podcast app launching this spring with luminary. You can listen to the shows you already love or sign up for luminary premium which gives you access to a network of forty ad free podcasts available only on luminary premium. Visit loom. Canary dot links lash how I built this and sign up for luminary premium before April twenty second to save a dollar off your subscription every month for the rest of your first year. Terms apply. Support also comes from the Walton family foundation where opportunity takes root more information is available at Walton family foundation dot org. Hey, it's a fear Eisenberg host of NPR's asked me another. And we're making the month of April all about women in comedy. We've got grittily and Leslie headline from the Netflix series Russian doll. So beloved Reta from NBC's parks and recreation and many more spread the word. Listen and subscribe now. And before we get back to the show this coming up Tober, we're going to be coming back to the yearbook Boina center for the arts in San Francisco for our second. How I built this summit supported by American Express over the course of two days, I'll have conversations with some of our most remarkable founders from the show, including David Neilan of JetBlue Murcia Kilgore of bliss Kevin system and Mike Krieger of Instagram Stewart Butterfield to slack. Jen. Rubio of away and many many more the summit isn't incredible opportunity to connect with other entrepreneurs and builders just like you from around the world last year summit sold out early. So to find out how to get tickets. Visit summit dot NPR dot org and hope to see you in San Francisco. Hey, welcome back to how I built this from NPR. So it's nineteen Ninety-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 below the commercials. 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 draining classes, which I give a presentation to I found I was very comfortable in those environments shirt. So I said set up a fake training class and bring in three cameras. Film me from different angles. And we will just bring in random office employees to ask me questions. I will answer them. And we will edit it into a good thing. What saying that? We've got rate suits sport coats. Here's why and OBI the way they're priced right now. And why did you think that would be compelling? I mean that sounds like the most boring commercial comeback to my mother's words. It never occurred to me. And I could say this about two dozen things in my life than most people would say didn't 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. He's I think I uttered it in eighty six. And how did that happen? It happened is an ad lib. And as I was at living the commercial, I'm having an inner dialogue with myself while I'm speaking. Yup. I didn't have much time since I was in a live recording. And all I could think of was I guarantee it and the beauty of I guarantee it was not so much the words because the words are 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 it, and I knew a that that was catching on. 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 giorno Georgia, and it was a great part of the company culture. So by the late eighty s you are still in Houston and the south bay. No where we have a fifteen stores in the bay area. Wherein Seattle Portland. Dallas. Sacramento, and Houston and what I'm still trying to figure out. Why didn't a bigger company try and undercut you? I mean, clearly you've got this thing going where you're selling Nino Cerruti suits, people try to open secret that you were selling them for one hundred dollars less than they Brandon Nino Cerruti suit without the label without the label. But if this is an open secret, why wouldn't some other company come in? And like Macy's or some big company and trying to do the same thing. 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 proud of this. I did all the training originally at men's and I used to say to our employee's. Look men look at going into a clothing store like going to the dentist office. So their wife says to them I made you a dental -pointment. 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 understanding we developed what we called shirts. So that when a man purchased a suit while he was in the dressing. We would put together shirts ties belts shoes. Everything that would make the outfit really jump. Then you would present it to the costumer, and we were not in my mind pushing, but we were not passive. Yeah. Sales people either. And the result was that our customers laud we had great service because they perceive this as serve. Service, and it drove a lot of revenue. So basically men the thinking was Mendel want to spend a whole lot of time shopping. They're generally buying stuff on the half. Do they're going to go in they're going to try on the suit and the and the pants, but while they're in the dressing room. We're going to bring them like a pink shirt and a blue shirt in the white shirt. We're gonna say, hey, these look great with the suit. Here's some great ties. And and they would say thank you for making it easy for me. I'm going to buy I'll take it all and they'd walk out. Exactly. Wow. So nine hundred ninety two you guys go public, and I guess the IPO Brinson a red like thirteen million dollars. That's correct. It doesn't sound like a whole lot for an IPO. Well, I was never trying to amass the greatest fortune than I could and. It turns out to have been. I think very good decision because although we had an IPO that only raised thirteen million. We then add four or five secondaries each secondary was at a higher value secondary stock offering him they're kind of like, I b O's. I think the nineteen nineties really was when he blow up right buttering. 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? What are consumer habits changing? No. I mean, first of all would the money that we got from the IPO in secondary's. We started opening fifty stores year or a store every week. So if you can imagine each store clause about a million. One dollars in inventory while in cities 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? Why? And why so we were at a training class when a my regional managers had dinner with me and said, you know, Georgia I went into a few tuxedos stores. He was in Seattle. And he said, you know, this is exactly what we do fit people in clothing. Yeah. Why don't we do this? And you said I said, let's try and he had twelve stores up there. And the first year we did one million dollars. They hold on. He he opened like a mini tuxedo rental shop with right or inside the store inside the store that just cordoned off a section as in. Just said tuxedo rentals here. Exactly. Okay. Everybody in my organization hated this idea. Yeah. Why are you doing tuxedo rentals? We got every time you screw up a wedding. You lose a customer. You know, this is not a way to build a clothing business. Yeah. So we rolled it out into our stores. A third a third third over three years. It took five years before the employees in the company stop complaining to me about being in this business, and I used to say to everybody, and it was it got to be redundant where I I would say. A look this is going to take a while to develop. But when it does it's going to be amazing. And I guess there was a point. I I read that something like one out of five suits in America was purchased at men's warehouse. Correct. That is astounding down. So I'm to fast forward to one particular chapter because going forward to two thousand eleven you stepped down as CEO of men's warehouse, and Doug, you're becomes the new CEO. And you picked Doug. You're right. I did I been I did want to retire. Doug had been my COO and had been doing a great job. So I said to him, you know, Doug or offices were next door. I said, I'm not retiring I'm gonna come to work every day young. But you're running things day to day. And I'd like you to get credit for that you then become what chairman of the board will have been German by IBM executive chairman indicate that I was still working just just said for 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 at us started. Did you? Back away. I never told what to do after he was made CEO I said to him, Doug. You're the it's your decision you make it the way you see. Okay. Now. This is a moment where I guess there begins to be considerable tension between you and the board. Yeah. What started to happen? What kind of sort of differences of opinion? Did you start to have with board members? I don't really know. Exactly. What happened because as it got closer to my termination, I was cut out a more and more of the discussions that the board was having. But I'll give you a simple example. We owned a division called Cain g and k and g did four hundred million. We had on stores, and it was a superstar 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 K G provides a unique opportunity for an offensive and defensive strategy. And they didn't quite understand what that meant. And so what it means is men's warehouse stores were able to raise the gross profit percentage by a full ten percent, which is a thousand basis points over a decade because k in g was protecting our opening price point position and at the same time because k and g was a significant national presence it prevented other stores from realizing that investing in low price. Clothing the way I had done in seventy three. Yeah. Would make sense. So the board and Doug wanted to sell Kane. Jay, and I told him that I would support them in selling it. But I didn't agree with it is, oh, it was that type of decision and the board represented in their public relations releases as though I was unwilling to see the thority, and I never understood what they were talking about. 'cause I was totally explicit in explaining Doug that he was the guy. All right. Chew nineteenth two thousand thirteen. Yes, you're fired from men's warehouse as the executive chairman you thrown off the board. This is the company that you founded in Houston in one thousand nine hundred seventy three what do you remember about hearing that news? Well, 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 went on to talk about getting rid of me. But it when he said unanimous consent on the in a room of friend will you knew, and I'm going unanimous mean I have Deepak Chopra as well as people that you don't know. And I can't believe that it is unanimous because I have done so many favors for all of these pieces by unanimous consent were asking you to step down. Will it first? They said to me, we'd like you to become chairman emeritus. And I said what is that? That and they explained it, and it was a figurehead position. And I said, Wendy, you need to know 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 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 and tell where in Fremont. And 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 tend nobody to really talk to well Deepak came up to my room that night and led me on a guided meditation because he was concerned that I wasn't taking into account. My legacy. He was right. I wasn't valuing my legacy. And what I was valuing was two things number one. I said look, I know I told you that dog 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. By animus consent. They decided to replace me. And they said to me and George we've put your furniture in storage. And I remember thinking you've put my furniture in storage Amine by furniture, and my knickknacks forty years of stuff that I had accumulated in fifty cartons were put in storage. And in the moment it felt like while damn if all these people who are my friends don't want me as their leader anymore than why do I want to be their leader? Obviously, there's something not right here. Were you hurt by your friends, essentially reject you? Did you feel personally hurt? No, I did not. It was not a complete surprise. There had been a phone call about two weeks earlier where the compensation committee chairman had said to me we're going to leave you in your position for the time being. And I remember thinking to myself who the hell are you to tell me that? But I knew that there was something wasn't right. But your entire life your entire identity. Everything you knew from the age of twenty three twenty four was men's warehouse. Yeah. How could you not have been hurt by being out? I in this may not be as as factory answer. But I don't get hurt the way you mean, it, I did not get depressed. I did not go into this poor me and a victim. But I mean, I get it that you didn't feel. Sorry for self or that's, but like, it's your identity and then one day, you've got it. You've got an office to go to their people. You know, there are people you see or George or I guarantee it and then the next day. You don't have that. That's a big deal. I'm completely comfortable in my skin. Almost all the time. People are interested in what I have to say. And I feel I have a lot of respect from people. I guarantee I see what happened in men's as really an example of capitalism run amok. Do you still keep in touch with any of those former board members not a one? So so so to say, you didn't take it personally is not really true. Oh, well, if I feel that I'm a great friend. And so when you heard me, the only way I have to get even with all my friendship and say, that's it. You're no longer friends, then I no longer want to speak to you. That's a normal human reaction. 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 I got divorced after this happened. The second time I have a great relationship with my children. I'm you know. Watching politics in the evenings. But 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 customer were different because of shirt stacking. We were more aggressive in the selling process when you walk into a Joseph Bank. They leave you alone to browse. And what I found was that you do a lot less business would that strategy than if you have a. Knowledgeable consultant who is genuinely interested in helping the costumer in whatever the customers lifestyle is the company is how would you describe the company today from the outside struggling do you own any shares anymore a few? Yeah. And do you feel a sense of satisfaction that they are struggling since your departure? Yes. In my new business is although we're very small relative to them we are competitors. So so I wanted to talk about your new businesses sect, but you leave men's warehouse, you're rich. You can do whatever you want. You can go to Hawaii. You can hang out with your kid where where are you wanna do? Right. Did you think about that doing that for some Thai tried for four months? I sat in my backyard in Piedmont, beautiful flowers, it was the summer. And 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 guess pretty soon after this you come up with an idea for a new business, which was an online tuxedo rental company called generation tax. Yes. And you launch this in I think what's number of two thousand fifteen right in when the people from into our house found out about it. What did they was it? Like a cease desists letter was her name. I guess I guess you didn't sign anything because you you didn't right. Play out where you didn't pledge not to give until you know, what men's has done? Meneses afraid of me is what it must be. Because after I was fired. The first thing I tried to do was buy from men, which was that retail company that they try to buy it from them for ninety million dollars. Okay. Well, it I 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 for four years. And I said, are you kidding? I'll give you two years, but four years is an eternity deal never happen to this day. They still can't find anybody that would offer them half of what I was going to pay. Then I had a relationship with Macy's. And we were going to provide Macy's with the tailoring for their online. Business not their stores. They're online business and as a lark. I asked my local guy if they would have any interest in doing a tuxedo rental thing with us. Yeah. And within a few months my team, and I were in New York in Terry. On grins office. The CEO of Macy's making a deal to be the tuxedo. Hawk Cedo rental. And we had the deal it went to legal review, and while it was legal review men's warehouse stolen. Because I could not get Macy's to agree to a no shop laws. So they shut it around. I don't know how it happened. But the next thing, I know Terry called me and said, I'm very sorry, George or were not doing it. Well, and I said who are you doing it with? And he said it didn't wanna tell me at first and then he's at men's warehouse. And I went you gotta be kidding me. Yeah. And. It doesn't make me vengeful or revenge fall, 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 start into any fifteen to your first year of profitability case because it startled took a long time for men's warehouse to get too. Well to really get two major pro, you know, this is much better. And you go online, and you 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 free home dry on. We'll do not only one to free home dry on 's we do free swatches. You know, we do a lot of things that make our business strong. And it's right now, it's starting to really fire on also wonders, George d you feel a sense of I dunno. Vindication. That you were right about things certainly were 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 in like that model. They did it hurt them 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 yeah, I think that you know, that there is a a real problem in America. I think that capitalism which clearly won the battle over communism. And even socialism is need in need a modification, and I'm a capitalist. What the hell I've been 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 staying -able would one of those adjustments be shifting the focus away from shareholders. Exactly, that's what it's about. Because it's always about short term profit. Yeah. George when you when you look over the course of your career the ups and downs. How much of your success? Do you attribute to your heart? Work and your intelligence in skill and how much do tribute to luck just being lucky riding a lucky wave. Well, I think they go in and hand in other words, I think you need luck. But you also need the talent and the intelligence to know how to take advantage of luck. I think that what happens in life. Unfortunately 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 men's warehouse today, George till runs generation tax. At some point. I'm gonna make you say, you know, that right? I'll say it right now, you're going to like the way you look I guarantee it. I think you're gonna put that as my phone ringer when I was at men's warehouse. I would go to charity auctions and auction off doing that for thirty five hundred dollars. Wow. I would do it for you for nothing, by the way. He's oh. Thank you very much. And please do stick around. Because in just a moment. We're going to hear from you about the things your building. But I quit message from one of our sponsors WordPress dot com with powerful site building, tools and thousands of themes to choose from users can launch a site that's free to start with room to grow. Get fifteen percent off any new plan. Purchase at WordPress dot com slash built this. Hey, thanks so much for sticking around. Because it's time now for how you built that. And today, we're updating a story we first ran about a year ago. It begins around nineteen Ninety-three in Guinea, west Africa, where Rehim Jolla was growing up and one of the things were hime loved as a kid was this sweet gingery, pineapple juice called Jin, Jen, which is a really popular drink in that part of the world. You know, you go by next on the side of the road. You often have we know women that have a little cooler of of Jinyan that they said along with it is essentially to us. This is like lemonade or I St. here, maybe milk to a lot of the kids Brahim's early childhood and Guinea was pretty great. But around the time he turned fifteen the political situation in the country became unstable and unsafe. So Rahim's parents sent him and his brother to the US, but Rehim overstayed his visa and was eventually caught by immigration. Officials and he ended up spending almost a year in detention honestly, looking back at it. It's now that I appreciate how difficult over time. You was gay just how. Alluded young and too naive to understand how how much trouble I within where he was eventually able to get a green card and then made enough money to go to community college. And then to Michigan State University the whole time he was missing home, his mom, his friends and even that pineapple drink. He loved as a kid in Michigan. When I'm playing Ford's when running around in the really hot summer that. Usually don't pine for coke. They think about Jinja now, you can find homemade pineapple ginger juice said some African restaurants, but you can't just walk into a chain store and buy off the shelf, so Rahim and his brother thought paid maybe we should start making it and selling it. And when they started doing research, the timing seemed perfect. Know, what is that the traditional the cokes Pepsi's all these other carbonated artificially flavored brand I'll have been. I'll have been losing market share point where they have all started to buy your smaller companies that are developing fresh organic products. Okay. So a great opportunity for something. Like jan. But as much as they love the stuff, they did not know how to make it. So they called up their mom in Guinea and asked for her recipe for future. Call sign up all fresh, lemon juice, Neela an easy way. This is all happening around two thousand fourteen and at this point, the two brothers are living in New York City. They start mixing a batch of Jinjiang in the Hamad's apartment and Rehim starts to give out samples to customers at the bar where he works then try from full to find the truth. By so full to find it to too much lemon or too little lemon or the find out pretty pronounced and four. It is months later after trial and error breaking in Muhammad gets the recipe exactly where they want it. And they decide to launch Jinjiang at an African festival in Harlan. Realized that we really onto something everyone that came by that would from west Africa that news of product could not your buy one bottle hit by two-three ticket pitchers send it to a friend. They sold out all of their bottles. And then he really big breaks. They won twenty five thousand dollars in a competition for budding entrepreneurs, so they moved into an industrial kitchen, and eventually they pitch Jinjiang a whole foods. And well, we're definitely relentless in terms of slowing them because we noon Portwood pointing those to get a distributor, and the distributor will interested in because in no, we're talking the whole foods food, we tend to play them against one another and it worked out. Well. Since launching in two thousand fifteen Jinjiang has made it into every whole foods in New York City, Long Island and Westchester county and Rahim is brother are looking forward to opening their first Jinjiang cafe in Harlan this summer if you want to find out more about rain Jolla or your previous episodes head to our podcast page. How I built this NPR dot org. And of course, if you want to tell us your story, build Tut, NPR dot org. And thanks so much for listening to the show this week. You can subscribe wherever you get your podcasts. And while you're there, please do give us a review you can also write to us HIV at NPR dot org. And if you want to send a tweet it's at how I built this. Our show was produced this week by Deepa Mohtashami with music composed by Ramtane Arab Louis. Thanks, also to Julia Carney JC Howard could see new grant Melissa grey Santa's Michigan four Jeff Rodgers. Our intern is Candice limb, I'm guy Roz, and you've been listening to how I built this. This is NPR.

Coming up next