Thursday, June 20, 2013

Men's Wearhouse Fires Founder George Zimmer

The Men's Wearhouse was big in Fresno back in the late-1980s, when I started at Fresno State. George Zimmer reminds me of that time of my life especially. It's only been more recently that I've shopped there, and my oldest boy rents his formalwear there as well. Good bargains and good service, overall. It's not exactly clear why Zimmer's out, however.

At the New York Times, "Dumping the Face, and Founder, of Men’s Wearhouse."

It seems that George A. Zimmer is no longer suited for Men’s Wearhouse.

The clothing retailer announced on Wednesday that it had fired Mr. Zimmer, who started the company in 1973, as executive chairman. For three decades, he had starred in its commercials, telling customers, “You’re going to like the way you look. I guarantee it.”

A disagreement between Mr. Zimmer and the board appeared to be the reason for the sudden dismissal, though it was not immediately clear what that disagreement was. Some analysts suggested that the conflict might be over the company’s efforts to appeal to younger customers, which could have been hampered by Mr. Zimmer’s continued presence in ads.

“Over the past several months I have expressed my concerns to the board about the direction the company is currently heading,” Mr. Zimmer said in a statement provided to CNBC. “Instead of fostering the kind of dialogue in the board room that has in part contributed to our success, the board has inappropriately chosen to silence my concerns through termination as an executive officer.”

The company gave no reason for Mr. Zimmer’s dismissal in its statement. A spokesman for the company declined to comment.

Showing just how abrupt the decision was, Mr. Zimmer’s firing was announced the same day as a scheduled shareholders’ meeting, which has been postponed “to renominate the existing slate of directors without Mr. Zimmer,” the company said Wednesday. The board released a statement Wednesday saying it “fully supports C.E.O. Doug Ewert and his management team.”

The company has more than 1,100 stores nationally, under the flagship Men’s Wearhouse brand along with Moores and K&G. The stores primarily sell suits and rent tuxedos.

Financially, it has been performing solidly, with sales increasing 5.1 percent in the quarter ended May 4 to $616.5 million. Sales for 2012 were $2.5 billion, up 4.4 percent, with profits rising to $2.55 a share from $2.30 a share.

Mr. Zimmer, 64, had been easing out of a leadership role at the company recently.

“He had been managing a transition, I thought, very effectively the last two years,” said Richard Jaffe, an analyst with Stifel Nicolaus. In 2011, Men’s Wearhouse promoted Mr. Ewert to succeed Mr. Zimmer as chief executive, and recently hired the designer Joseph Abboud as creative director along with a new chief financial officer. Perhaps Mr. Zimmer “was reluctant to give up the reins,” he said.
Well, London's Daily Mail said something about how Zimmer became eccentric, about how he brought Deepak Chopra to the board in 2004. Yeah, Deepak Chopra, that avatar of men's fashion sense, or something.

See, "Founder of Men's Wearhouse - famous for his slogan 'You're going to like the way you look. I guarantee it' - is FIRED abruptly 40 years after setting up the chain."