The Mens Wearhouse: Success in a Declining Industry

1
The Mens WearhouseSuccess in a Declining
Industry

• Akanksha Bhat
• Lauren Cummins
• Megan Swierc

2
Videos

• 1985 Commercial
• Newer Commercial

3
Discussion Question

• George Zimmer strongly believes in the idea of
  tapping untapped human potential as the key to
  success, whereas most other companies believe in
  more quantifiable measures of success like
  plants, equipment, or trademarks. What do you
  think is the best measure of success?

4
Discussion Question

• At the Mens Wearhouse, the people you manage
  work with are YOUR customers, as well as Clients
  of the Store. How does this set them apart from
  other companies?

5
Discussion Question

• At the Mens Wearhouse, they use the term
  mentoring instead of training the term coaching
  instead of criticizing. Do you believe that this
  makes a difference in employee development?

6
Discussion Question

• The 5 stakeholder groups of the Mens Wearhouse
  in order of importance are employees, customers,
  vendors, communities, shareholders. Do you
  agree with this order? Do you think putting
  shareholders at the bottom of this hierarchy is
  the best way to maximize their long-term value?

7
Discussion Question

• The Mens Wearhouse emphasizes store operations
  selling more than merchandising marketing. Do
  you agree with this strategy?

8
Discussion Question

• What are the differences between a Clerk, a
  Consultant, a Slammer when it comes to working
  in a retail store like the Mens Wearhouse?
• Role Play Exercise

9
Discussion Question

• With compensation based on a combination of base
  salary commission, without offering any team
  incentives, do you think it is reasonable for the
  Mens Wearhouse to expect their employees to work
  as a team?

10
Discussion Question

• Do you think it is a good idea for the Mens
  Wearhouse to hire for basic personality skills
  rather than for experience?

11
Discussion Question

• The Mens Wearhouse does most of its training
  through its hierarchy promotes mostly from
  within. Do you think they should bring in some
  outside methods of training or trainers?

12
Training Activities

• Suits High 2 day program for wardrobe
  consultants held 7-8 times a year
• Sales Associate University 1-2 day program held
  7-8 times a year
• Suits University 4 day program for all employees
  except sales associates held up to 22 times a
  year at headquarters
• Advanced Suits University 2 day program for
  assistant managers held 4-6 times a year at
  headquarters

13
Training Activities continued

• As-Needed Training
• 1-2 day orientation for wardrobe consultants
• 2 day orientation for sales associates
• 1 day orientation for assistant managers
• 3 day orientation for district managers held 1
  time a year at headquarters
• Informal Training
• Saturday morning meetings
• One-on-one training

14
Discussion Questions

• The Mens Wearhouse does not have a precise
  training budget for the company. Do you think
  this is a good idea or a bad idea?
• Can the systems culture surmount the strains
  inevitable as the company grows personal
  contact with the senior leadership inevitably
  diminishes?
• Are there any problems lurking in what the
  company is doing?
• What can should the senior management team do
  to ensure that the firms past success continues?

15
Needs Assessment Exercise
16
The Mens Wearhouse Today
17
Today

• Under Mr. Zimmer's leadership, Men's Wearhouse
  has become the largest retailer of tailored
  clothing in the U.S. and Canada.
• Today, the company has 3 brands
• Men's Wearhouse,
• KG and
• Moores
• The stores carry a full selection of designer,
  brand name and private label suits, sport coats,
  dress and casual clothing, as well as shoes and
  accessories.
• The Men's Wearhouse Group is also moving into the
  women's clothing line in many of its KG stores.
• 73 of the 93 KG stores operating on February 3,
  2007 offered ladies' career apparel that is also
  targeted to the more price sensitive customer.
• Since going public 15 years ago, Men's Wearhouse
  has increased its annual profit from 5.9 million
  to 149 million.

18
Company Description

• The firm operates more than 1,200 stores
  throughout North America.
• Primary operations are
• -Men's Wearhouse, which has about 545 stores
  (mostly in strip malls),
• -Moores Clothing, and
• -500 newly acquired After Hours Formalwear
  stores that sell and rent tuxedos.
• Men's Wearhouse sells tailored suits priced 20
  to 30 less than competitors, as well as shoes,
  formal wear, and casual clothes.
• As of July 31, 2003 the Mens Wearhouse is
  reducing travel expenses and improving
  communications across all its business segments
  by using the Web meetings services of WebEx
  Communication (NASDAQ WEBX).
• It is able to include multiple departments, like
  accounting, inventory and distribution in the
  evaluation process.

19
Company Description continued

• Top Men's Wearhouse Competitors
• Brooks Brothers New York, NY
• Burlington Coat Factory Burlington, NJ
• Jos. A. Bank Hampstead, MD
• Company Ranking within Sector 13
• Market Cap 1.3 Billion
• Turnover among store managers is only about 10
  annually, far below the industry average of
  25.1.
• In 2004 Deepak Chopra was appointed to the board
  of directors. Chopra writes books and gives
  seminars on spirituality and alternative
  medicine.

20
Some Unusual Practices

• CEO George Zimmer's attempt to see each employee
  in person once a year and the practice of flying
  store managers to California with unheard-of
  regularity.
• Men's Wearhouse employees receive, on average, 40
  hours of training a year.
• It is difficult to say exactly how many trainers
  there are in the company, because almost everyone
  trains.
• The company has few employees dedicated
  exclusively to training, and it does not employ
  outside training consultants.
• There is no set budget for employee development
  senior managers are expected to spend whatever is
  necessary.

21
Unusual Practices continued

• He shuns glitzy retail areas and malls,
  preferring to open stores in outdoor plazas.
• He even stars in his own TV commercials. "I have
  more belief in my company than anyone else,"
  Zimmer says. "So why hire an actor?"
• It is Zimmer's policy that no employee or
  interviewee will ever undergo a criminal
  background check or drug test.
• Every five years, all full-time employees receive
  a three-week paid sabbatical on top of their
  regular vacations -- virtually unheard of in the
  retail industry.
• The company loses a mere 0.4 percent of revenue
  to theft, less than the typical 1.5 percent loss
  suffered by big retailers.
• Mens Wearhouse made the Fortune 100 Best
  Companies to Work For in America in 1999, and
  again in 2000 and 2001,2004, 2006, and 2007.

22
Thank You!