"George Zimmer takes on Men’s Wearhouse with tuxedo startup" by David Gelles New York Times September 14, 2015
NEW YORK —Last year, George Zimmer was ousted from Men’s Wearhouse, the company he founded. His latest startup, an online tailoring platform, is not doing so well. But now, Zimmer is sure he has a winner.
On Tuesday, the graybeard ambassador of affordable suits will unveil his newest venture, Generation Tux, a website for tuxedo rentals.
Generation Tux is the second company that Zimmer, 66, has started this year. In May, he unveiled zTailors, which he hoped would be an “Uber for tailors.” But in an interview, Zimmer acknowledged that zTailors had not yet matched the success of Uber, the ride-hailing app valued at $50 billion.
“We’re still losing millions of dollars,” he said.
After more than three months in operation, zTailors was producing sales of about $200,000 a month, he said, and facilitating about 1,000 monthly matches between tailors and customers. That is not enough for the company to break even, Zimmer said.
Those who use zTailors give the service high marks, but Zimmer said he had not figured out how to generate enough business.
“We expect to grow a lot larger,” he said. “When we figure out the flywheel to generate demand, we think we have a winner.”
When it comes to online tuxedo rentals, however, Zimmer is confident that given the perennial need for formal wear, and an increasingly tech-savvy consumer base, there is an enormous untapped market.
“Generation Tux is definitely a winner,” he said. “I think it’s the best idea I’ve ever had.”
Zimmer is certainly betting as much. Using mostly his own money, with small investments from friends and other investors, he has already spent more than $6 million to have 30,000 tuxedos made, construct an elaborate website, and prepare a big distribution warehouse.
******************
With his foray into the tuxedo rental business, Zimmer is competing directly with his former company.
Men’s Wearhouse rents more tuxedos than any other company, and has found it to be a surprisingly lucrative business. The company reported $443 million in revenue in tuxedo rentals last year, up from $406 million in 2012.
“Nobody had the idea that it was such a golden egg,” Zimmer said. “Tux rental is enormously profitable, like Microsoft profitability.”
Yet Men’s Wearhouse, which last year merged with its rival Jos. A. Bank, has not yet started an online version of the business, leaving itself exposed to new competition. As a recent BuzzFeed headline put it: “Online Tux Rentals Are The Elephant In The Room For Men’s Wearhouse.”
--more--"
No longer a good fit, sorry.
Looks good on you, though.
