Published on: December 3, 2015
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Hi, Kevin Coupe here, and this is FaceTime with the Content Guy.
There was a piece in the New York Times the other day that grabbed my attention. It was about George Zimmer - you remember him, right? He is the founder of Men's Wearhouse who was unceremoniously dumped from the company after a boardroom fight that he lost.
Now, I'm not naive about these kinds of fights. There usually is plenty of blame to go around, and lots of ego driving the conflicts. In the Men's Wearhouse case, there also was something else at play - the company's acquisition of Jos A. Bank for $1.8 billion, which came after Jos A. Bank tried to acquire it but failed.
What interested me in the story was that Zimmer, who was a retail guy, told the Times that he's happy in the two internet-based businesses he's created since leaving Men's Wearhouse, and is "so happy not to be working in the retail store business.”
Now, one might expect him to say that. After all, he's not in the retail store business anymore, and probably is enjoying to some degree the fact that both Men's Wearhouse and Jos. A Bank have been suffering.
But here's the line that grabbed my attention. Talking about the merger, Zimmer said, “A deal never made sense. Why do you want to add hundreds of retail stores when there’s more competition than ever from the Internet?"
It seems to me that this is a canny observation that more retailers ought to be making, especially these days, when we seem to be enduring a flurry of mergers and acquisitions. The legitimate question that needs to be asked is whether the companies that are trying to get bigger by adding chains and stores are in fact investing in a business model that is on its way to being increasingly irrelevant.
I'm not saying bricks-and-mortar stores are going away. But I am suggesting that maybe business leaders need to think twice before investing in deals that not so long ago might have made sense, but today, not so much.
Put too much money in bricks-and-mortar, as opposed to investing in the future, and it is at least possible that you're not going to like the way you look.
I can almost guarantee it.
That's what is on my mind this Thursday morning. As always, I want to hear what is on your mind.
- KC's View: