Former Men's Wearhouse chief George Zimmer (Los Angeles Times )
A month after parting ways with its founder, suit retailer Men’s Wearhouse Inc. is executing a new strategy, buying designer Joseph Abboud’s brands for $97.5 million in cash.
The purchase of JA Holding Inc., which is majority-owned by funds affiliated with J.W. Childs Associates, gives Men’s Wearhouse Inc. exclusive labels to sell in its stores.
The strategy is popular among retailers such as J.C. Penney and Macy’s, which tout the unique brands as a point of differentiation from rivals.
Joseph Abboud, whose products have been spotted on celebrities such as actors Tracy Morgan and Jeremy Renner, has served as chief creative director of Men’s Wearhouse since December.
Men’s Wearhouse has executive offices in Houston and Fremont, Calif., and more than 1,100 stores. The acquisition of the Abboud brands, which is expected to close in the third quarter, comes with a domestic factory with 450 workers.
PHOTOS: Major retail controversies
“This transaction accelerates our strategy of offering exclusive brands with broad appeal at attractive prices,” Men’s Wearhouse Chief Executive Doug Ewert said in a statement.
Ewert was handpicked for the top post by the company’s founder, George Zimmer, two years ago, but the two men have since clashed over how to operate the chain.
The Men’s Wearhouse board removed Zimmer as executive chairman in June, provoking a war of words between the snubbed leader and the company.
Late last month, Men's Wearhouse commercials appeared on YouTube without Zimmer's well-known, gravelly voice.
Zimmer hits back at Men's Wearhouse, says he's not 'obstinate'
Men's Wearhouse fires founder George Zimmer; no reason given
Men's Wearhouse: Zimmer tried power grab, privatizing before firing