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Ousted Men's Wearhouse Exec Had Board Disputes

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In a surprise move that shocked many who love "Big and Tall" suits and inexpensive prom tuxedos, the Men's Wearhouse board of directors on Wednesday ousted the face and voice of the company - George Zimmer - from his position as executive chairman, without stating why.

In a statement, the board said it “expects to discuss with Mr. Zimmer the extent, if any, and terms of his ongoing relationship with the Company.”

In light of Zimmer's termination, the Fremont, Calif.-based company also announced that it is postponing its annual meeting of shareholders, which had originally been scheduled for Thursday. The purpose of the delay, the board said, is to re-nominate the existing slate of directors without him.
 
Many know Zimmer from years of commercials where he repeated the same slogan in his folksy voice: “You’re going to like the way you look. I guarantee it.”
 
Zimmer fired back in a statement telling CNBC: "Over the last 40 years, I have built MW into a multi-billion dollar company with amazing employees and loyal customers who value the products and service they receive at MW. Over the past several months I have expressed my concerns to the Board about the direction the company is currently heading. Instead of fostering the kind of dialogue in the Boardroom that has in part contributed to our success, they Board has inappropriately chosen to silence my concerns through termination as an executive officer.
 

 As of Wednesday morning, Zimmer was prominently displayed on the company website, as its founder, including his smiling and pullout quote. There was even a page called "George Zimmer in action" listing his many YouTube videos.
 
And many of his loyal fans quickly jumped on social media, supporting the man they have seen on their television sets for years. "The board is going to hate the way this all turns out. I guarantee it," posted Jack Bagley to the bottom of this story.

The Men's Wearhouse was founded in 1973 and is one of North America's largest specialty retailers of men's apparel, with 1,143 stores.

When Zimmer wasn't selling suits, he spent some time as a medical marijuana activist. Campaign expenditure reports show Zimmer donating more than $150,000 to Prop. 19, an unsuccessful California measure to legalize marijuana in 2010. He also was a major philanthropist to charities he believed in. One was the Institute of Transpersonal Psychology, which honored him with an honorary doctor of philosophy in humane letters at a ceremony in San Francisco.

Under his leadership, the Men's Warehouse has been long listted on Fortune's "The 100 Best Companies to Work For" since 1999.

The abrupt departure comes a week after Men's Wearhouse reported that its fiscal first-quarter profit increased 23 percent, helped by stronger margins and an earlier prom season.

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. He was CEO from 1991 to 2011, when he became executive chairman.

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 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.

Zimmer owned 1.8 million shares of Men's Wearhouse as of the company's May 9 proxy filing, a 3.5 percent stake in the company.

Shares of Men's Wearhouse fell more than 2 percent, or 80 cents, to $36.67 in morning trading. The stock has traded between $25.97 and $38.59 in the past 52 weeks, and ended Tuesday up about 20 percent since the start of the year.


The Associated Press' Anne D'Innocenzio contributed to this report.

 



Photo Credit: AP

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