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Men’s Wearhouse founder speaks at VIA B2B

George Zimmer explains how a business can operate both ethically and profitably in the current times

Posted: March 21, 2013 2:00 a.m.
Updated: March 21, 2013 2:00 a.m.

George Zimmer, founder and CEO of the Men's Wearhouse, speaks at the Valley Industry Association's Business-to-Business Industry Show at the Hyatt Regency Valencia on Tuesday.

 

“Compassion and forgiveness are just as important as accountability and hard work,” said George Zimmer, founder and executive chairman of the Men’s Wearhouse.

Speaking at the Valley Industry Association’s annual B2B conference on Tuesday, Zimmer told luncheon guests at the sold out Santa Clarita expo that operating a business ethically and doing right by both employees and customers alike isn’t as expensive as one would think.

With annual sales of $2.5 billion in 2012, Zimmer stressed that the profitable company with 1,143 stores is a New York Stock Exchange-listed, for-profit business. Total net sales reported for the fourth quarter 2012 increased 9.1 percent, according to the company’s results report.

Referring to the Men’s Wearhouse business philosophy as “conscious capitalism,” Zimmer said the men’s apparel retailer focuses on balancing the interests of both its stakeholders and shareholders.

“We believe we do well financially when we do business the right way,” Zimmer said.

Sharing that Men’s Wearhouse has built a culture of trust with people over the 40 years since it has been in business, Zimmer said the retail chain’s employee theft loss rate of one-half of 1 percent is less than the rate of one of the country’s largest department stores.

While accounting for some $10 million in loss annually, Zimmer said that rate is lower than major competitors, stressing the “most important aspect to the organization’s success is trust.” The company does not believe in polygraphing or drug testing potential or existing employees, nor using secret shoppers, he said.

Even when faced with employees who disappoint the company, after being given a second chance, Zimmer said he was “never willing to give up his principles just because things didn’t always work out,” for the sake of making money.

“There’s a connection between our low shrinkage rate and being recognized as one of Fortune magazine’s top 100 companies to work for,” he said.

Last year was the 12th time Men’s Wearhouse has landed on the “100 Best Companies to Work For” list since 2000, landing in the no. 50 spot in 2012, up from 55 the previous year.

The men’s retailer also adopted a “servant leadership” management model that calls for putting the needs of others first.

Practicing that philosophy, the company continues to cover 70 percent of its employees and their families medical costs; executive level pay is restricted by how much the total compensation is allowed to exceed that of a store manager; it set up a charitable fund to help employees in crisis; set up infant care centers for working mothers; and recognizes the top 200 employees with $5,000 vacations annually. It’s a matter of “taking care of your own tribe,” Zimmer said.

“We measure success by our ability to create success for others,” Zimmer said. “It has served us very well over time.”

Businesses today are often justifiably criticized for lack of ethics, Zimmer said.

“Businesses should be measured and defined by ethics,” he said. “It’s up to the Board of Directors and shareholders to make that happen.”

Flying into Santa Clarita to speak at VIA’s B2B expo, Zimmer appeared at his own expense.

“I always come down at my own expense,” he said. “I almost never get any reimbursement or speaking fee.”
After the lunch, attendees visited 44 business exhibitor booths, according to Kathy Norris, VIA CEO and president.
At the end of the B2B industry show, VIA members closed out the expo with cocktails, appetizers and the chance to mingle with other business owners and organizations both within, and outside of, the Santa Clarita Valley.

 

 

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