The Associated Press
George Zimmer, center, talks to Andy Dolich prior to a meeting in 2009. Men's Wearhouse Inc. says it has dismissed Zimmer, its founder and executive chairman. In a press release issued Wednesday, the company didn't give a reason for the abrupt firing of Zimmer, who built Men's Wearhouse from one small Texas store using a cigar box as a cash register to one of the nation's largest specialty retailers in men's clothing, with 1,143 locations.
The Associated Press
NEW YORK — Men’s Wearhouse doesn’t like the way its founder looks anymore.
The men’s clothier said Wednesday that it has fired the face of the company and its executive chairman, George Zimmer, 64, who appeared in many of its TV commercials with the slogan “You’re going to like the way you look. I guarantee it.”
The company announced the move in a terse statement that gave no reason for the abrupt firing of Zimmer, who built Men’s Wearhouse Inc. from one small Texas store using a cigar box as a cash register to one of the North America’s largest men’s clothing sellers with 1,143 locations.
The firing appears to end the career of one of TV’s most recognizable pitchmen. Zimmer’s slogan became almost a cultural touchstone, and his natty but down-to-earth charm made dressing sharply feel more accessible to men.
Zimmer said in a written statement that over the past several months he and the company’s board disagreed about the company’s direction.
“Over the last 40 years, I have built The Men’s Wearhouse into a multi-billion dollar company with amazing employees and loyal customers who value the products and service they receive at The Men’s Wearhouse,” he said in a statement. But he noted that “instead of fostering the kind of dialogue in the boardroom that has, in part, contributed to our success, the board has inappropriately chosen to silence my concerns by terminating me as an executive officer.”
The bad blood spooked investors, who drove Men’s Wearhouse’s stock down 53 cents to $36.94. The stock is still near its 52-week high of $38.59 and ended Tuesday up about 20 percent since the start of the year.
Beyond creating a successful company, Zimmer is known as something of a cowboy in the business world.
He brought in spiritual leader Deepak Chopra as a member of the company’s board in 2004. He put his fortune to work behind California’s failed Proposition 19 in 2010, which would have legalized marijuana in California, where he lived. And Men’s Wearhouse didn’t conduct background checks on new hires because Zimmer believed that everyone deserves a second chance.
“He’s one of a kind,” said Richard Jaffe, a Stifel Nicolaus analyst. “He’s an entrepreneurial visionary. ... He made looking terrific available for every man in America.”
Zimmer declined to comment for the article through his personal publicist beyond the statement. Calls to company executives and board members were immediately referred to a company spokesperson, who declined to comment beyond the release.
Jaffe speculated that Zimmer, who handed over his title as CEO to Douglas Ewert in 2011, may have had difficulty in letting go of the company’s reins.
“Clearly, something happened abruptly and fairly dramatically,” he said. Jaffe also speculated that perhaps the company was looking for a new spokesman so it could target younger shoppers.
Like many clothing retailers, Men’s Wearhouse saw its sales and profits battered during the Great Recession, but over the last two years the company’s business has been recovering.
For the latest year ending Feb. 2, the company’s revenue rose 4.4 percent to $2.48 billion. Net income rose 5.3 percent to $131.7 million.
The firing comes a week after Men’s Wearhouse reported that its fiscal first-quarter profit increased 23 percent.
Three months ago, the company said it was conducting a strategic review of its K&G store division, which it acquired in 1999. The division, which accounts for about 15 percent of the company’s total revenue, is very promotional and has seen its business decline. Jaffe speculated that deciding what to do with that division could have been a point of contention.
Still, a few other analysts and experts in executive recruiting said privately that the ousting could be something more than just wrangling over the direction of the company and pointed out that the timing of the announcement was odd. It happened the morning the company’s annual shareholder meeting had been set to take place. The company delayed the meeting but didn’t give a new date.
The company said the purpose of postponing the annual meeting is to re-nominate the existing board of directors without Zimmer. It said the board expects to discuss with Zimmer the extent, if any, and terms of “his ongoing relationship” with the company, language that seemed to leave a small window open for him to remain an advertising spokesman.
Also highlighting the suddenness of the firing: The company’s website still prominently spotlighted Zimmer for much of Wednesday, calling him “The Man Behind The Brand” and linking to YouTube videos of “the man in action.” The pages were still available by midafternoon, though a prominent link from the site’s front page had been removed.
“This is very rare to fire a founder. Founders are generally entrenched in the company,” said Eleanor Bloxham, CEO of The Value Alliance, a board advisory firm.
In 1971, fresh out of college, Zimmer made his first foray into the clothing industry, working in Hong Kong for six months as a salesman for his father’s coat manufacturing business, according to the company website.
In 1973, he and his college roommate opened the first Men’s Wearhouse store, which sold $10 slacks and $25 polyester sport coats, in Houston. His personal car was a van with the company logo on the side and clothing racks in the back.
The company aired its first TV commercial in the 1970s when commercials for clothing were rare. Zimmer starred in his first commercial in 1986, with the line “I guarantee it.”
Men’s Wearhouse kept expanding, focusing on large markets where business was sluggish to take advantage of lower real estate costs. It also expanded beyond sports coats and trousers to casual sportswear in the 1980s and then went into the tuxedo rental business in 2000.
The company went public in 1992, and the company has been cited by Fortune magazine as one of the top 100 best companies to work for.
Zimmer owned 1.8 million shares of Men’s Wearhouse as of the company’s May 9 proxy filing, a 3.5 percent stake.
The company, based in Fremont, Calif., also runs the Moores retail chains. It also sells uniform and work wear in the U.S. and U.K.