You're not gonna like your forced retirement, George Zimmer. I guarantee it.
The Men's Wearhouse (NYSE:TLRD) longtime spokesman was unceremoniously let go by the board of the company he founded on Wednesday, shortly before the company's quarterly earnings call. A number of investors -- Zimmer included -- were understandably upset, and shares fell following the announcement.
In the aftermath of that decision, at least one prominent analyst has chimed in to assert that Men's Wearhouse is looking to improve its standing among millennial men, and getting rid of the hirsute sexagenarian was a first step toward that goal. Now, thanks to YouGov's BrandIndex polling, we can see just how the younger consumer views Men's Wearhouse. It's not pretty:
This graph represents the "purchase consideration" of Men's Wearhouse against some of its largest suit-selling competitors, listed as Jos. A. Bank (UNKNOWN:JOSB.DL), Macy's (NYSE:M), and Nordstrom (NYSE:JWN), among others. The industry average has been pretty steady, but Men's Wearhouse appears to be wearing thin among millennials (and among male consumers on the bubble between the millennial generation and Generation X). If that's so, then why did Men's Wearhouse report a nice spike in profits in its latest report? Well, older consumers still like the way they look in a Zimmer-promoted suit:
Suit sellers are in a strange bind, because data on millennial clothing spending appears to be a bit contradictory. On one hand, a survey by marketing agency fluent (yes, it spells its name in lowercase), shows that 49% of surveyed college students plan to buy clothes for a job or internship, compared to only 44% who plan to buy casual attire. On the other hand, an MTV survey of millennial workers found that 79% think that they should be able to wear jeans to work, and 93% prefer a job that allows them to dress comfortably. "Work clothes" doesn't have to mean a suit at all anymore -- it could just be a pair of nice jeans and a button-down shirt, which is far more the purview of Macy's and Nordstrom (which both sell upscale jeans) than it is of Men's Wearhouse.
A Fiscal Times survey on millennial spending habits show that millennial men do appreciate some brands that can suit them up -- Ralph Lauren, Banana Republic, and Kenneth Cole all ranked highly. A Spanish branding agency conducted a survey of over 4,200 millennials in over two dozen countries and found that Dolce & Gabbana, Burberry, and Hugo Boss were all popular among younger shoppers. Men's Wearhouse is nowhere to be found. Incidentally, most of these brands can be found at Macy's or Nordstrom, in either the suit section, or elsewhere.
Will firing Zimmer -- and most likely replacing him with a "hipper" spokesman -- yield the millennial-baiting results that Men's Wearhouse's board wants? Probably not. Millennial men may simply be more likely to approach suit buying as a luxury rather than a necessity, which makes Men's Wearhouse's cost-conscious options far less appealing. However, as long as the majority of suit buyers remain older buyers, Men's Wearhouse can coast comfortably along on the modest employment growth occurring from month to month -- people older than 35 have much better employment rates than those in the millennial cohort, anyway. That might not matter now, though, as the company may have shot itself in the foot by ousting a well-known and popular public face without any sensible explanation. When you build a brand around one person, it can be difficult to move on to the next marketing face without a major stumble.