Men’s Wearhouse management was right to shed its subsidiary, K&G — a store selling discontinued brand-name goods. The chain represented a third of the company’s overall square footage, and poor same-store sales were keeping the company chained down. Zimmer wanted K&G to stay, but the numbers just didn’t support his thesis.
The company has a strong balance sheet and a growing core brand — even if a now gone celebrity spokesman anchored it.
Bottom line: The way I see it, current investors should not be selling based on Zimmer’s departure.
The article Men’s Wearhouse Looks Better Off originally appeared on Fool.com and is written by Michael Lewis.
Fool contributor Michael Lewis has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned.
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