The Men's Wearhouse Case Study

The Men’s Wearhouse

The Men’s Wearhouse,Inc. is one of the largest off-price retailers of men's tailored business attire, founded by George Zimmer in 1973, based in Houston,Texas. By 1999 the company operated more than 600 stores in the U.S. and Canada. They achieved a five-year compounded annual growth rate of 29% in net income during the period from 1995 to 1999. Until 2017, Men’s Wearhouse sell its products through approximately 700 stores,as well as online. For the full year of 2016, the company announced the net sales of $3,098.4 million. With a two year aggrement with the NBCA to dress the coaches in Jiseph Abboud Custom suits for the 2016-2017 and 201-2018 seasons, the company expects comparable sales in fiscal 2018.

Strategy: The Men’s Wearhouse offers designer brand name and private label merchandise (suits, sport coats, slacks, business casual, outrwear, shoes and accessories) to middle to upper middle-income men at a 20-30% lower price in comparison with regular retailers. The company believes that men do not like to shop and structures its approach on that assumption, therefore, there is only one sale each year. The stores are typically small, located in shopping centers or in storefronts rather than regional malls. However, the core of The Men’s Wearhouse’s strategy is: to offer superior customer service delivered by knowledgeable, caring sales people, called Wardrobe Consultants.

Values and Philosophy: The words of Zimmer, founder of the company, express their philosophy: “We are in the people business, not the suit business…We focus on our people, and since we are in the retail business, hopefully we will create quality relationships with the customers”. A wardrobe consultant is expected to define his/her success not only in terms of the individual goals, but also the goals and aspirations of other people in the store.

Operations

Staffing & Compensation: The Company looks for people who care about people. The employees are encouraged to make mistakes and learn from them. Consultants earn somewhat more than standard for the industry, but senior executive salaries are low compared with similar companies.  Almost 100 percent of the people own stock in The Men’s Wearhouse.

Training and Career Development: Senior executives have been in the company for long time and worked their way up. They have many opportunities to become manager. People at each level have responsibility for the development of those below them. In the training sessions the consultants acquire sales skills as well as raise self-esteem.

Performance Management, Leadership and Communication: The Men’s Wearhouse emphasizes constructive and behaviorally specific feedback, focused on actions and behaviors that can be changed. Managers are expected to be regularly in the stores. Senior leaders also travel regularly to the stores to help with the training activities. There is an emphasis on having leaders who serve the organization and the people in it.

Key Success Factors

The success of The Men’s Wearhouse is mainly driven by two elements:

Superior customer service. The wardrobes consultants give a careful treatment to the customers and build a long term relationships with them.  These consultants do not behave as the same as clerks only meeting the initial customer request; they are trained to give professional advice according to the client preferences.

Employees are the first priority of the company. This philosophy of focusing on people broke the standards of low pay, little training, lots of part-time work and bad treatment to employees in the industry. As the consultants are treated even better than professionals in this case, they respond with an energetic, positive and proactive attitude to their work. These employees with a feeling of loyalty to the company are the ones who generate long term customer relations by delivering an outstanding service every day.

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Values and Organizational Culture are difficult to imitate

Competitors could try to offer similar salaries implement more training or arrange more          

group meetings or events for employees, but those activities will not cause a real transformation in a company without the strong commitment of the CEO and the top leaders to promote an organizational culture focused on people.

The philosophy of Zimmer to develop people to be the best they can do, is rare to find in the industry. Some values can be easily written in a corporate mission, but difficult to apply in the company operation.