Menguin, an online tuxedo rental startup previously headquartered in Fayetteville, has been acquired for $25 million by competitor Generation Tux, a company founded by Men’s Wearhouse founder George Zimmer.
The two businesses will continue to operate as separate brands under the holding company, Gen Tux, based in Louisville, Ky., according to a press release from Generation Tux.
The agreement closed on Sept. 5 and was publicly announced on Tuesday (Sept. 19).
Menguin co-founder Justin Delaney is now president of both companies, and Menguin’s leadership team has relocated to Louisville, Delaney said in an email.
“We will keep a presence in Northwest Arkansas and hopefully be opening a retail store there soon,” he said.
Menguin started in Atlanta but relocated to NWA after making connections with leaders on the area startup scene.
When the company was featured earlier this year for its role in the local e-commerce industry for Talk Business & Politics’ and the Northwest Arkansas Business Journal’s Startups to Watch, Delaney said Fayetteville-based Acumen Brands founder John James wrote Menguin its first investment check.
The e-commerce company Acumen Brands in 2013 notably raised $83 million in capital.
Delaney and Menguin’s other co-founder, Kurt Sutton, believed they could learn a lot about the business in close proximity to James, the surgeon-turned-entrepreneur, who — since exiting Acumen Brands in 2015 — founded the venture capital production studio Hayseed Ventures and the cloud-based e-commerce platform Engine.
Menguin’s leadership set up an office in James’ Hayseed Ventures space in downtown Fayetteville and since then has had three consecutive years with an 800% compound annual growth rate, according to the Generation Tux press release.
Zimmer now serves as chairman and CEO for the holding company. He founded Generation Tux in 2014, one year after leaving his position as executive chairman of Men’s Wearhouse, which he founded in 1973. He served as CEO of the company until 2011.
“I’ve always known a good suit when I’ve seen one, just as I’ve always known a good investment when it comes my way,” Zimmer said, according to the press release. “We built Generation Tux to be the ultimate high-tech, high-touch clothing rental experience. Menguin’s digital marketing and entrepreneurial leadership sparked my interest. Upon meeting, it became clear that we could do more together than apart.”
“When George first approached us about marrying the entrepreneurial spirit and marketing technology of Menguin with the backend technology, brand legacy and menswear expertise inherent in the Generation Tux name, we immediately embraced his vision for the union,” Delaney said in the press release. “Together, we are well-positioned to become the singular, dominant player in the online formal menswear rental category.”
The retailer offers 14 styles and more than 300,000 suits and tuxedos available for rent, with thousands of accessory and color options.
Menguin earlier this year reported having six distribution centers around the country and about 20 full-time employees.