George Zimmer, founder of Men’s Wearhouse (MW), last summer pitched venture capitalists on a new endeavor: Generation Tux, an e-commerce tuxedo rental business. His goal was to raise $22 million in Series A funding, according to a pitchdeck obtained by Coins2Day. The round would have given the company a pre-money valuation of $6.9 million.
Doing business as zTux, Inc., the company has obtained 13 trademarks for logos featuring the names “Generation Tux” and “Seven26.”
Zimmer’s solicitation includes a final closing date of July 20, 2014, with plans to soft-launch the business last fall and fully launch in the first quarter of this year. In October, Zimmer announced at a Salesforce.com (CRM) conference that he would disclose more details on a new “high tech, high touch” company in the next few months.
However, no announcement has been made, and Coins2Day was unable to learn whether the company raised the funding. Or even still exists. Attempts to reach Zimmer, his former PR representative and his CFO were unsuccessful.
Zimmer, who was listed as Generation Tux’s chairman, founded Men’s Wearhouse in 1973. Dubbing himself a “business warrior monk,” he became famous for his commercials and catchphrase, “You’re gonna like the way you look, I guarantee it.” He served as the company’s CEO and Chairman until 2011, when he relinquished the CEO role. In 2013, he was removed from the chairman role in a public dispute with the board of directors over control of the company.
Generation Tux sounds a bit like web-based tuxedo rental startup Black Tux, which has raised $15 million in VC funding since being formed in 2012. In late 2013, Zimmer offered to make a sizable investment in Black Tux, according to sources familiar with the situation. Black Tux, which positions itself as a renter of high quality tuxes, declined Zimmer’s offer because it involved repositioning Black Tux down-market.
Generation Tux’s business plan is to rent tuxedos that cost $120 to $150. In the pitch, Generation Tux lists serial entrepreneur and venture investor Chris Hemmeter as the new company’s CFO, and former Men’s Wearhouse executive Scott Silverstein as its CEO.
The pitch predicted $5.4 million in revenue in 2015, with plans to be cash flow positive by 2016. By 2018, Zimmer’s plan showed $82 million in revenue with profit margins of 47%. In late 2018, Generation Tux models an exit valuation of $520 million, which would deliver a 20x return for potential investors. That is, of course, assuming there was ever an actual entry valuation…