George Zimmer, the man who was missing in the merger of Men’s Wearhouse and its chief rival, Jos. A. Bank, has finally broken his silence.
Mr. Zimmer was ousted as chairman of Men’s Wearhouse in the months before the company he founded and Jos. A. Bank started a feud that lasted for months before finally agreeing to a $1.8 billion deal. During the entire process, Mr. Zimmer, who still owns a 3.7 percent stake in Men’s Wearhouse, refused to comment.
On Friday, Mr. Zimmer gave the deal a mixed review and also demonstrated a certain disconnect from the process, misspelling the name of Jos. A. Bank in a statement.
“To the extent that the merger of Men’s Wearhouse and Jos. Banks provides the combined companies employees and customers a great work environment and shopping experience respectively, I’m supportive of the move,†Mr. Zimmer said.
But Mr. Zimmer went on to issue a warning for the combined company’s management.
“However, having been a business leader in the industry for over 40 years, I’ve seen the adverse effects of Wall-Street-controlled mergers, which emphasize cost-cutting and other bottom line efficiencies that come at the expense of happy employees and satisfied customers,†he said. “I hope Men’s Wearhouse is able to avoid such a result.â€
While Men’s Wearhouse did emphasize the possibility of synergies in announcing its $65-a-share deal for Jos. A. Bank, the suggestion that the merger is “Wall-Street-controlled†does not quite make sense.
The buyer is not a private equity firm, which would likely strip out costs and squeeze a target for profits, but a strategic firm looking to expand. And while Men’s Wearhouse employed investment bankers from JPMorgan to provide it with advice, the company’s board was in the driver’s seat.
The final irony is that Mr. Zimmer himself considered taking Men’s Wearhouse private with the help of private equity firms, in what could have genuinely been called a “Wall Street-controlled merger.†Those deliberations led to his ouster.
