How I Built This with Guy Raz - Men's Wearhouse: George Zimmer

Episode Date: April 15, 2019

In 1970, George Zimmer was a college graduate with no real job prospects and little direction. That's when his father, an executive at a boy's clothing company, asked him to go on an important business trip to Asia. It was that trip that propelled him into the world of men's apparel. In 1973, the first Men's Wearhouse opened in Houston with little fanfare. But by the mid-80s, George Zimmer managed to carve out a distinct niche in the market – a place where men could buy a good quality suit, at "everyday low prices," along with all the shirts, ties, socks, and shoes they need. With George as the face of the brand, Men's Wearhouse became a multi-billion dollar empire with hundreds of stores across the U.S. But then, in 2013, a bitter battle forced him to give it all up. PLUS in our postscript "How You Built That," we check back with two brothers from Guinea, West Africa who founded a company that makes Ginjan, a spicy-sweet juice from their childhood that mixes pineapple and ginger. See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

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40 years of stuff that I had accumulated in 50 cartons were 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? From NPR, it's 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 burkin bag by Hermes. It costs around $20,000, and Hermes knows it's only going to sell a small number of them a year. You sell 500 Birken bags a year, that's $10 million 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 20 or 30 bucks a piece. 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 made well now and again, but also pick a few things up at Target. That is the customer most fashion brands are 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 70s 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 were trying on your suit, the salesperson 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 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 U.S.

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 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 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? 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. So you in 1966, you 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 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, 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 Washu studying economics, I think, right? Right. And meantime, back in Scarsdale, your dad's business makes. 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, took advantage of what he might have been able to achieve. What was your dad making?

What kind of clothes was he making? Inexensive boys' outerwear like what we called snorkel jackets. Out here they would be called ski jackets, nylon shells. He also made more of an upscale boys' raincoat. And when John John Kennedy was standing at his father's funeral in that famous photo where he salutes, he's wearing my father. mother's raincoat. Wow. Amazing. I mean, 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 71 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 hippie, 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 stead, which I did.

And really, that's the beginning of my business experience. So, 1971, he says, hey, I want to 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 we get to what was known as Idaho Wild Airport back then. Right, JFK. Right.

It was called Idaho. a while then. And it was Pan Am 1 flying from New York through Fairbanks, Alaska, to Tokyo. Wow. And then I was switching and flying down to Osaka. All right. So you fly from New York via Fairbanks in Tokyo. You get to Osaka. By the way, what are you, I mean, are you 23 years old? And were you like 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 going to love you in Asia because you're my eldest child, your number one son, and they're

going to 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 hotels, 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 to find factories, give them samples to make and then send them back to New York and be sort of the middleman. Got it.

And 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. Oh, wow. I ended up settling in Hong Kong. So did you find a factory that you decided this is the one that's going to work? No, I did not. I found many factories that made samples, which I dutifully 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 72 presidential election. And I actually got a job in the McGovern campaign working in Chicago in the summer of 72 in charge of what was called grassroots fundraising. And I remember I moved to Texas on Election Day, 1972. Why? My father offered me a job in Dallas,

repping his line in Texas, Oklahoma, Louisiana. So you get back to the U.S. 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? Because the rep he had there had quit.

So he had reps all over the country? He did. And what would they do? Go to department stores or small shops? Go to department 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 fun. So you moved to Dallas in 72 and what? You start going, making appointments and trying to say, hey, you know, we were making these raincoats and these jackets and, you know. For six months, I traveled the 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 federated department store. And I went in and sold the boys buyer some sport coats that were not in my opinion the correct sport coats he should have bought. But I was too new in the job to speak up and let them make the order because it was an order. 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 400 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, he informed me that they were dropping me. So I had about a five-hour drive from Houston back to Dallas. 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. Well, let me wind us back a little bit. Because it can't have been that quick. Or maybe it was. I'm trying to, I mean, you are your dad's rep in Dallas for six months. for 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 did that happen? How did that idea even come to you?

I'll tell you that 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 just my father, but the sales manager's vision. I always wanted to be able to have my own dreams and to follow my own dreams. And so the primary reason I opened 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 25.

Younger. 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, because my understanding is that your dad's primary business was making clothing for boys? He had expanded so that his product assortments 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 and sport coats. Right. 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 money, 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 opened 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 Houston, in the business. 1973, did you start the company by yourself or did you do it with somebody else? Well, no, 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 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. Nice. And how did you guys get the money to open that first store?

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. That's right. And the way that worked was that I had only $7,000 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 80 raw steel rolling racks, which is what we used for store fixtures in the first store. How big was that place?

It was 6,000 feet. So big place? Rent in Houston was it cheap? Well, it was $3,500 a month. Got it. All right. So 1973, you and Harry opened the store, men's warehouse, had it go. 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 codes for $25, slacks for $10, 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 was it a hit right away? Well, we did 3,000 the first Saturday.

And then Monday we did $60. 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 guys are running this place. And it doesn't sound like it was, I mean, aside from that first day, it doesn't sound like you guys were really breaking the bank, you know, doing, you know, 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 a third store in Houston. But 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 ties and suits and belts and things like that? We started to get into a broader product assortment in the mid to late 70s. We first went right to suits.

and we had a salesperson. He was the EVP for Hard Shafter and Marks based in Chicago. That was what? They were America's largest clothing manufacturer. And he came to see us. And I said to him, they had the line, Nino Sir Rudy. And I said, we'd like to buy that line from you. And he said, forget about it.

I sell foleys, I sell. And I said, well, let me tell you the whole story. We want to buy the line without the label, but we want a 20% discount. So it would be a white-labeled men's warehouse, Nino-Seruti 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 beat me, I won't bother you again. The rest is history. You beat him in the game. I beat him and we got Nino Seruti suits white labeled, but at a 20% purchase discount, which enabled us to sell them moderately profitably at $199 when everybody else in America was selling them at $2.99. That was the essence of the business. So I guess there's a way for Art Schaffner and Marx

or any of the clothing manufacturers to sell more of their suits if they white-labeled them, even if they were selling to at a lower price. Exactly. When did you first expand outside of Houston? In 1980, 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 Ruth Atkins or some other Bay Area store.

Department store. No, it was a men's store, okay. Clothing store. And there was not a regular-priced 100% wool suit for under $300. And we were selling 100% wool suits for $199. So I went back to Houston and told my team that we could pick up Dallas later, and we were going to go right to the Bay Area before things changed. Where in the Bay Area?

So we started in the South Bay. We opened in Mountain View, San Jose, Fremont, and then we had one store up in Concord. So this is in the early 80s. The tech boom is really just beginning. Presumably your customers were professional men? Yes, mostly professional men. And you opened up there, and what happened? Did people flock to it, or was it kind of, again, you know, mixed results?

I would say mixed results. We were not really successful until the mid-80s, in my opinion. What happens in the mid-80s to make men's warehouse really successful? Well, we were put under duress. Our bank in Texas called our loan, and so we were put in a difficult position. They called your loan because they were getting worried about you? No, it's a, in the early 80s, there was a general meltdown of all the banks in Texas. 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. So we had to 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 what? The selling price was much lower than what the ticket price was? Yes, 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 decide we need to stop holding sales, lower our everyday prices, and basically send out the message that we offer low everyday prices. Exactly. 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 a Hail Mary. Well, I think the toughest part of this was 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 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, how George Zimmer's Hail Mary paid off in a big way

and the origins of that iconic slogan. You're going to like the way you look. I guarantee it. Stay with us. I'm Guy Raz, and you're listening to How I Built This from NPR. Hey, welcome back to How I Built This from NPR. So it's 1986 and Men's Warehouse is 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 and we will edit it into a good message. Saying what? Saying that we've got great suits and sport coats. Here's why. And oh, by the way, they're priced right. Wow. And why did you think that would be compelling? I mean, that sounds like the most boring, dull commercial ever. I can only come back to my mother's words. It never occurred to me. And I could say this about two dozen things in my life that 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 86. And how did that happen? It happened as an ad lib. And as I was ad-libing the commercial, I'm having an inner dialogue with myself while I'm speaking. Yeah. 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 going to find. Yeah.

But 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 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 it was a great. part of the company culture. So by the late 80s, you are still in Houston and the South Bay? No, we're in, we have 15 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-Serudy suits. It would probably an open secret that you were selling them for $100. $100 less than a branded Nino-Serudy suit. Without the label. Without the label. But if this is an open secret, why wouldn't some other company come in like Macy's or some big company and try to do the same thing? Well, 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 employees, 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 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 understanding, we developed what we called 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 going to go in, they're going to try on the suit 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 and a white shirt. And we're going to say, hey, these look great with the suit. Here's some great ties.

And they would say, thank you for making it easy for me. I'm going to buy it. I'll take it all and they'll walk out. Exactly. Wow. So 1992, you guys go public. And I guess the IPO brings in, I read like $13 million. That's correct.

I mean, it doesn't sound like a whole lot for an IPO. Well, I was never trying to amend. the greatest fortune that I could. And it turns out to have been, I think, a very good decision because although we had an IPO that only raised $13 million, we then had four or five secondaries. Each secondary was at a higher value. Secondary. Stock offering. They're kind of like IPOs. I think the 1990s 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, because you now are going to cities all across the United States, right? Right. So what's going on that allows this expansion? Are consumer

habits changing? No, I mean, first of all, with the money that we got from the IPO and secondaries, we started opening 50 stores a year or a store every week. So if you can imagine, each store costs about a million dollars in inventory. Wow. In cities all across the country. Right. All 50 states. You hit, I think, a billion dollars in revenue in 98.

And then in the early 2000s, the expansion continues. 1999, you start to rent out tuxedo. How did that happen? And why? So we were at a training class. One of my regional managers had dinner with me and said, you know, George, I went into a few tuxedo 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 12 stores up there. and the first year we did $1 million. Wait, hold on.

He opened like a mini tuxedo rental shop within the store. Inside the store. Yeah, inside the store. They're just a cordoned office section and it just said, Tuxedo rentals here. Exactly. Okay. Everybody in my organization hated this idea.

Yeah. Why are you doing tuxedo rentals? We got suits. 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, a third, a third over three years. It took five years before the employees in the company stopped complaining to me about being in this business.

And I used to say to everybody, and it got to be redundant where I would say, hey 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 read that something like one out of five suits in america was purchased at men's warehouse correct that is astounding astounding so i want to fast forward to one particular chapter because this is going forward to 2011 um you stepped down as CEO of men's warehouse And Doug Ewer becomes the new CEO. And you picked Doug Ewer, right? I did.

I had been, you know, I didn't want to retire. And Doug had been my C-O-O and had been doing a great job. So I said to him, you know, Doug, our offices were next door. I said, I'm not retiring. I'm going to come to work every day. Yeah. 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? Well, I had been chairman. Right. I became executive chairman to indicate that I was still working. Just a reality check. After you made that decision to step 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? 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. 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 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 K&G, and K&G did 400 million. We had 100 stores. And it was a super store in the sense that it was 25,000 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 10%, which is a thousand basis points over a decade because K&G was protecting our opening price point position. And at the same time, because K&G was a significant national presence, it prevented other stores from realizing that investing in low-price clothing the way I had done in 73 would make sense. So the board and Doug wanted to sell K&G.

and I told them 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 cede authority. And I never understood what they were talking about because I was totally explicit in explaining to Doug. that he was the guy. All right, June 19th, 2013. Yes. You're fired from Men's Warehouse as the executive chairman.

Yes. Thrown off the board. This is the company that you founded in Houston in 1973. 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, and six foot seven, stood up, which made him quite intimidating, and said to me, you know, George the board by unanimous consent and went on to talk about getting rid of me.

But when he said unanimous consent, I'm in a room of friends. People you knew. And I'm going unanimous. I 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 people. He says by unanimous consent we're asking you to step down. 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 10 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 10 o'clock that night. So we were in a hotel.

So I was just by myself in a hotel. 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 had nobody to really talk to. 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. And he was right. I wasn't vouching.

my legacy and what I was valuing was two things. Number one, 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, they decided to replaced 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. I mean, my furniture and my knick-knacks, 40 years of stuff that I had accumulated and 50 cartons were 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. Were you hurt by your friends essentially rejecting 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 23, 24, was men's warehouse. Yeah.

How could you not have. been hurt by being ousted. Well, and this may not be a satisfactory 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 I'm a victim. But, I mean, I get it that you didn't feel sorry for yourself or that stuff. But like, it's your identity. And then one day you've got it. You've got an office to go to. There are 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 care about. I see what happened at men 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 to say you didn't take it personally is not really true.

Oh, well, I feel that 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 got divorced after this happened for the second time. I have a great relationship with my children. and 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 1.8. billion dollars, turned out to be a bad decision. Yes. And the reason is because men's warehouse thought that the Joe Bank customer and 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 with that strategy than if you have a knowledgeable consultant who is genuinely interested in helping the customer in whatever the customer's 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, and my new business is, although we're very small relative to them, we are competitors. So I want to 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 hang out with your kids. Whatever you want to do. Right. Did you think about that, doing that for some time? I 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 Tux.

Yes. And you launched this in, I think, what, September of 2015? Right. And when the people from Men's Warehouse found out about it, what did they think? Oh, my God. Was there like a cease and desist letter? Was there anything like, I guess you didn't sign anything because you, right? You didn't pledge.

Right. You didn't pledge not to get in. If I tell 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 buy K&G from Men's. Which was that retail company that they owned. You try to buy it from them. For $90 million.

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

Deal never happened. To this day, they still can't find anybody that would offer them half of what I was going to pay them. 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, their 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. And within a few months, my team and I were in New York in Terry Lundgren's office. the CEO of Macy's, making a deal to be the... Toxedo.

Toxedo, 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 could not get Macy's to agree to a no-shop clause. Uh-huh. So they... They shopped 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, but we're not doing it. Wow. And I said, who are you doing it with? And he said, he didn't want to tell me at first. And then he said, Men's Warehouse. And I went, you've got to be kidding me. Yeah.

And it doesn't make me vengeful or revengeful. It just makes me more determined to do what I know how to do. What is a status of generation tux now? I mean, you started in 2015. This will be our first year of profitability. Because it started out. It took a long time for men's warehouse to really get to major productivity. Oh, yeah, 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 try on, we'll do not only one, two free home dry-ons. We do free swatches. You know, we do a lot of things that make our business strong, and 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 you were wrong about certain things. Everyone's wrong over the course of their career. But I guess you were right in certain ways. You did not want men's warehouse to acquire Joseph A. Bank. You didn't like that model. They did. It hurt them. Does being right, is that important to you? I think so. Why? Well, I'd 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 real problem in America. I think that capitalism, which clearly won the battle over communism and even socialism, is in need of 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 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 look over the course of your career, 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 attribute 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 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 of Men's Warehouse. Today, George still runs Generation Talks. At some point, I'm going to make you say it. You know that, right? I'll say it right now. You're going to like the way you look.

I guarantee it. I think I'm going to 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 $3,500. Wow. Nice. I would do it for you for nothing, by the way. Thank you. Thank you very much. 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 1993 in Guinea, West Africa, where Rahim Jalo was growing up. And one of the things Rahim loved as a kid was this sweet jihad. injury pineapple juice called Jinjan, which is a really popular drink in that part of the world. You know, you go buy snacks on the side of the road. You often have, you know, women that have a little cooler of ginjan that they sell along with it. Essentially to us, this is like lemonade or iced tea or maybe milk to a lot of the kids. Rahim's early childhood in Guinea was pretty great.

But around the time he turned 15, the political situation in the country became unstable and unsafe. So Rahim's parents sent him and his brother to the U.S. But Rahim 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 of the time it was. I guess I was a little young and too naive to understand how much struggle I was in. Rahim was eventually able to get a green card and then made enough money. to go to community college and then to Michigan State University.

But the whole time, he was missing home. His mom, his friends, and even that pineapple drink he loved as a kid. Yeah, in Michigan, when I'm playing sports, when I'm running around in a really hot summer, I usually don't plan for a Coke. I think about ginger. Now, you can find homemade pineapple ginger juice at some African restaurants, but you can't just walk into a junk. chain store and buy it off the shelf. So Rahim and his brother thought, hey, maybe we should start

making it and selling it. And when they started doing research, the timing seemed perfect. We noticed that the traditional, the coax, the Pepsi's, all these are the carbonated, artificially flavored brand. I've been losing market share to a point where they have all started to buy up smaller companies that are developing fresh, organic products. Okay, so a great opportunity for something like Jin 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. Fresh ginger, cold-bressed pineapples, fresh lemon juice, vanilla, anise. Anyway, this is all happening around 2014, and at this point, the two brothers are living in New York City.

They start mixing up batches of Jin-Jan in Muhammad's apartment, and Rahim starts to. to give out samples to customers at the bar where he works. They'll try some folks would find the ginger to be too spicy. Some folks will find it to have a little too much lemon or too little lemon or the pineapple is not pronounced enough or it is. Eight months later, after trial and error, Rahim and Muhammad get the recipe exactly where they want it. And they decide to launch Jinjan at an African festival in Harlem.

It was one of those moments we realized that we're really onto something. Everyone that came by that was from West Africa that knew the product could not just buy one bottle. You know, they'd buy two or three, take a picture, send it to a friend. They sold out all of their bottles. And then, a really big break. They won $25,000 in a competition for budding entrepreneurs. So they moved into an industrial kitchen and eventually they pitched Jin'an to Whole Foods and, well, We were definitely relentless in terms of showing them because we knew Whole Foods wanted us to get a distributor,

and their distributor was interested in us because they know we're talking to Whole Foods. So we kind of played them against one another, and it worked out well. Since launching in 2015, Jinjan has made it into every Whole Foods in New York City, Long Island, and Westchester County. And Rahim and his brother are looking forward to opening their first Jin Jan cafe in Harlem this summer. If you want to find out more about Rahim Jalo or hear previous episodes, head to our podcast page, How I Built This.NPR.org. And of course, if you want to tell us your story, go to build.npr.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 at HIVT at npr.org. And if you want to send a tweet, it's at How I Built. this. Our show was produced this week by Diba Motasham with music composed by Ramtin Arablui. Thanks also to Julia Carney, J.C. Howard, Norf Kudze, Neva Grant, Melissa Gray, Sanazmesh Kempore, and Jeff Rogers. Our intern is Candice Lim. I'm Guy Raz, and you've been listening to How I Built This. This is NPR. There are millions of books out there, just waiting for you. But how to keep up?

Introducing NPR's Book of the Day. Every weekday, we feature some of our favorite conversations with authors and writers about their latest books. You can check it out in about the time it takes to Walk the Dog. Happy reading.