George Zimmer is building his empire.
Generation Tux, the online tuxedo rental business founded in 2014 by the gravelly voiced founder of Men’s Wearhouse has acquired a competing business called Menguin in a stock exchange deal worth $25 million.
As part of the deal, Menguin has relocated to Louisville, Ky., the headquarters of Generation Tux, and its chief executive officer, Justin Delaney, will become president of both brands, which will continue to be run as separate businesses. His cofounder Bogdan Constantin will serve as chief marketing officer.
“I met these guys about a year ago and they had a small company that was doing about the same volume we do,” Zimmer said. “But the difference was that we invested many millions more than they did. They built their business on old-fashioned hard work and knowledge.”
The four-year-old Menguin has been experiencing a compound annual growth rate of 800 percent. Generation Tux expects to have sales next year of between $20 million and $30 million.
He said the number of rentals and revenue of the two companies was similar, but the expense structure at Generation Tux is much higher. One marked difference is that Menguin did not own its rental inventory while Generation Tux does.