For those of us who have worked in and around corporate environments, it’s not uncommon to hear shareholder centric comments like “the shareholders aren’t happy” or “what will our shareholders think?” Those investors who support your business are important to keep in mind, but, ironically, they aren’t always the best judge of what your customers want.
If there is too much emphasis on the stockholder and not enough emphasis on customers, it is inevitably a losing strategy.
Men’s Wearhouse and Shareholder Centric Strategy
George Zimmer was a scrappy entrepreneur who took one store in Houston in 1973 and built it into a multibillion dollar empire. It was successful for many years, but in recent years it suffered from many symptoms of a shifting customer landscape. Casual Fridays in offices gave way to wear-what-you-want dress codes everyday. Weddings, an important part of their tuxedo renting business, have been decreasing in both frequency and cost due to the lagging economy. And let’s face it, many people are unemployed and don’t need more suits!
When Zimmer was removed from his very public executive position earlier this year, the board members who made the decision weren’t talking. Zimmer himself implied it was over conflict about strategy of where the company was heading, but it’s impossible to know the real story. And now, Men’s Wearhouse seems to continue to be a downward spiral, reporting a 28 percent drop in profit at the end of the last quarter.