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Russ: This is the BusinessMakers Show heard here and seen online at theBusinessMakers.com. And its guest time on the show. And I am very honored and pleased to have with me George Zimmer, founder and CEO of The Men's Wearhouse. George, welcome to the BusinessMakers Show.
George: Russ, it's a pleasure to be here. Sorry, it took so long.
Russ: Well, it did take a while. Man, you were on my target list starting about five years ago. But I feel great about having you now. All right. So let's go all the way back to the beginning, 1973, I believe it was.
Russ: You didn't show up in the business world with the standard set of business credentials. I mean, you had a BA in economics and you grew up in the same era that I did, where the so-called revolution was taking place. And, boom, you stepped into the business world. What triggered the idea to do this?
George: Well, I think that one of the very, very attractive things about starting this business, and the reason I started a clothing business and not a computer business or a real estate business, is my father had been in the clothing business, and so I had some contacts, because I only had about $7,000.00 in real money when I started. But what I've always enjoyed going back to the beginning and right to today, is I love writing the rules for the organization. And it - you talk about rationalizing what happens in business. I'm now rationalizing it against the ethics of the '60s. It's a unique opportunity.
Russ: Well, cool.
George: Unique opportunity.
Russ: Cool. You've had this tremendous support from your employees. It's obvious that they do very, very well for you. But in tough times sometimes, you even have to do these reduction enforces. I would assume that you've experienced that.
George: We have. And one of the things going back, again, to the early '80s when we did have our financial difficulties, as the person who is ultimately responsible, it became very personal for me not to make decisions that I would, in retrospect, refer to as "soft," when after a number of soft decisions, you might end up with a layoff. So it was easier to make the tough decisions.
Russ: Right. Interesting, very interesting. Okay. We're sitting right now less than a mile from Store No. 1. I've seen pictures of it. And it's not quite like your stores today. I think it's was tile floors and some racks and some suits. I assume you were there the first day and opened the door. I mean, were you worried that maybe nobody would come in, and even if they do, will they buy?
George: Well, yes. And, actually, for years I used to have that same worry when we'd open a new store. Will anybody show up? But when we opened on Westheimer in '73, it was Labor Day Weekend, and so myself and two guys were literally doing everything ourselves. There were no contractors involved. And the sign for The Men's Wearhouse was stenciled on 4x8 sheets of plywood.
We did not have a ladder tall enough to get up to the roof, so I climbed up the plumbing pipes in the back of the center, and these other two guys handed up the 4x8 sheets of plywood, which we then sort of ratcheted to the steel superstructure and illuminated it. You see? This is - when you look back, you go, "Well, how did you ever have the audacity to do this?" But we illuminated the sign with a 100-foot of extension cord out the front door of the store to a spotlight just sitting up on the roof. It seemed perfectly normal.
Russ: [Laughs] That is so cool, so cool. And people did come in and people did buy suits.
George: Well, actually, we did not sell suits when we started. We sold sport coats and slacks. And they were all $25.00 for the coats, $10.00 for the slacks.
Russ: My goodness.
George: And most of them were double-knit. But, no, we started - we didn't have shirts. We didn't have ties. We didn't have suits. We didn't have tailors. We had what we could basically put together.
Russ: Now another thing that's just so unique about you, you sort of have this avant-garde approach to business. I've heard you refer to it as a conscious capitalist. And I think there would be a lotta people from the old school, from business school, that would say, "Well, at the end of the day, that doesn't work." I think you completely negate that philosophy.
George: Well, I don't believe that running a business the way Men's Wearhouse is run will enable you to make more money than running it the way most MBAs have been trained, which is that there's only one goal, and that's maximizing shareholder value, and everything else is extraneous. And I believe that that's actually one of the reasons why we're in so much - have so many problems in the world today, is that that is how we define capitalism.
And if we would simply say that there are three to five stakeholders as opposed to shareholder in every business, and they have a stake in not just the results, but how the results are achieved, I happen to rank 'em in terms of Men's Wearhouse, as our employee group, number one, our customers, number two, our shareholders, number three, and then the vendors that supply us and the communities in which we operate. But you have to when making decisions, make - and you do this much like you do math problems where part of it is being done in your head - you have to be able to sort of balance these five different interests. And the goal, I've always said, is to find solutions that are wins for three of the five, if not everybody.
Russ: And once again, to put this thing in perspective, one out of every five men's business suits that is sold these days comes from a Men's Wearhouse store. And I also understand now that about 30 percent of the tuxedo rental business these days is owned by The Men's Wearhouse. That is just incredible. And sales today over $2 billion. Is that right?
George: That's right. And those numbers were approximately correct that you used.
Russ: All right. So my goodness, was there ever a thought back in the beginning that you would be this big and this successful?
George: Not back in the beginning, which may have something to do with why we did become successful. Instead of thinking and dreaming about a big future, we stayed focused on our knitting, so to speak. But that did change in the mid to late '80s. By then, I had a sort of warm feeling inside that this was able to be done in any city in the country. And I would stop and go, "My goodness, that's an awfully large business." That's what's happened.
Russ: Great, great. Well, I know, I've sort of looked at the demographics of your employees. And I mean, it is the minority piece is just huge. And the fact you're mostly in men's clothing, and yet there's 50Â percent female. And I believe you actually attract a group that is really motivated because it's like an opportunity, because you're not having MBAs show up. In fact, you're having a lotta people without college degrees show up and actually become professionals.
George: Most without college degrees. We have less than five MBAs, I would imagine, in the entire company. And I'm not actually a proponent of - certainly of MBA programs. But generally speaking, I think that organized education is overrated.
Russ: [Laughs] Right, right, right. Well, let's say that we've got somebody in our audience that's been off the planet for the last three decades share with our audience how you end each one of those TV commercials.
George: Well, I say, "You're gonna like the way you look. I guarantee it."
Russ: Real cool. Was that like some big New York ad agency that said, "George, we want you to do it this way"?
George: As you know, it was not. And what it shows about advertising - and I apologize for those of your audience that are going into the advertising or marketing business - but what really drives the success in my experience, is repetition and consistency, not creativity. And I think people who are in the business tend to get more hung up on the creative aspects. They start to think of themselves more as artists and less as businessmen. We have the same problem with tailors, by the way, who can fall into that same trap. So what we noticed as really a throwaway line, just that people seem to be able to remember it. And so we've stayed with it for 25 years, and that's why it works.
Russ: I kinda did a little poll when I was getting ready for this, about people that had incredible success stories from The Men's Wearhouse. And I couldn't believe how many people had after-hours or before-hours emergency situations that they were able to resolve. And do you train and preach that?
George: We do. And we use the example from Fred Smith's company about the employee in the Denver office, I believe, that during a blizzard rented a helicopter without any authority, and delivered a package. and it cost several thousand dollars and he was held up as a model of great initiative and freethinking. So -
Russ: That's so cool. Well, listen, before I let you go, I wanna ask you this question that has been sort of a standard question on the BusinessMakers Show. Let's imagine that there's an aspiring entrepreneur that's listening or watching the interview with you right now, totally tuned in. And what sorta general advice would you give him or her about starting on a career of business and entrepreneurship?
George: Well, it is I think simply that if you do something that you are passionate about, then you will never experience going to work. You'll always be playing. It may be like a board game more than like when you were a child playing with Tinker Toys. But it just will not ever be work. That's been my experience.
And then to sort of refine that because the truth is, as I mentioned off mic, Russ, I don't really like tailored clothing. When I'm not in the public eye, I'm in jeans or sweats. And so how does a man like that find passion in the men's clothing business? And the answer is, is that I do everything but the clothing. And I'm extremely passionate about creating incentive plans for thousands of people, for creating the corporate culture where people still feel they're working for George and not a big company. I still love talking to Wall Street and making real estate deals, and, of course, the marketing. But the clothing, I just let people who love doing clothing do the clothing.
Russ: Great. Well, I'm thinking that if you keep doing what you do, you just might be successful someday.
George: I'm holding my breath.
Russ: All right. So as we're departing and ending this cool interview, you've gotta end it with your iconic remark.
George: Well, if you want to hear about entrepreneurship I recommend that you listen to the BusinessMakers Show. In fact, you're gonna like the way this show goes. I guarantee it.
Russ: Thank you so much, George. That's George Zimmer, founder and CEO of The Men's Wearhouse. And you're listening to the BusinessMakers Show heard here and seen online at theBusinessMakers.com.