At this point, it's still too soon to know exactly why Men's Wearhouse abruptly dumped its founder and bearded, twinkly-eyed public face, George Zimmer. The unceremonious ouster certainly didn't do the company any favors, puzzling fans of Zimmer's "I guarantee it!" schtick, and it seems likely that there's more to the story.
Even so, there are a few ways in which the whole episode reflects what's going on in the broader world of work. Formal wear, after all, is something of an economic indicator: People buy suits when their jobs require them. But suits don't necessarily mean the same thing to all generations, which makes marketing to a broad swath of consumers somewhat tricky.
Here's why Men's Wearhouse is a good way of understanding what's going on in the economy:
1) Menswear is doing great.
One of the confusing elements about Zimmer's departure is that Men's Wearhouse was actually doing very well, as its customer base started getting back to work. The company's stock price began climbing out of its recessionary hole in 2009, a little before male employment hit bottom and started rebounding in 2010 — faster than both women's apparel and women's employment. Also, even though the labor force participation rate is still declining, white-collar jobs have come back stronger than construction and manufacturing, meaning that a larger percentage of the employment base might need to go shopping for buttondowns.
2) The kids are still dressing up.
Reports indicate that the board of Men's Wearhouse might have been concerned about 64-year-old Zimmer's ability to connect with a younger demographic. But wait, why is that important? The 20-something population is famously underemployed, taking its sweet time on the road to adulthood. Apparently, though, they're still buying suits — as much as the baby boomers still are, and more so than the 30- to 45-year-old set that's weighed down with family responsibilities. "It's more of an aspirational category for the men in our generation," says Jahnia Sandford, an apparel analyst with Kantar Retail, referring to the millennials. "It's definitely more of a fashion forward statement than a corporate responsibility. It's not about something they have to do, it's about something they want to do to look nice."
3) Guys are bargain hunters...
Of course, that doesn't mean everyone can shell out a few grand to look nice. Men's Wearhouse suits typically cost $300 to $700, which people on a post-recessionary budget can stretch to afford — and they even stock the slim-fit suits that mimic the high-end ones guys are swarming over in New York City. "Men's Wearhouse for a while was really able to put value in front of every other retailer," says Marshal Cohen, chief industry analyst at the NPD Group. "They caused other retailers to change." Jos. A. Bank, for example, followed up with ridiculous-sounding sales.
5) ...But they still hate to shop.
Menswear generally is also doing extremely well in the Internet economy, because guys are much less likely than women to want to go clothes shopping at all — especially for something as unsexy as low-end formal wear. "It’s the difference between having many customers who want to be in the stores and who enjoy getting clothes that they like and customers who find shopping for clothes one-quarter notch more pleasant than dental surgery," notes Evan Schuman, editor of StorefrontBacktalk.com. And they've also moved aggressively into tuxedo rental, a high-margin business that's also expanding at a time when people are more likely to share or rent big-ticket items than buy them.
But Men's Wearhouse's dominance may not last long. Even lower-end retailers, like T.J. Maxx and Ross Dress for Less, are getting into the menswear game as well. "Basically everybody's looking for growth," Cohen says. "And even a little growth is very attractive."