Dumping the Face, and Founder, of 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 KG. 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.

Mr. Jaffe suggested that advertising might have split Mr. Zimmer and the board. The company has been trying to appeal to millennials, and has been evaluating whether Mr. Zimmer’s appearance in the advertisements resonates with younger shoppers, Mr. Jaffe said.

“They continually rework it, adjusting how much presence do we have on George. Does he stand? Does he sit? But it’s always all about George Zimmer — his voice, his physical presence,” he said. “An old guy with a gray beard may not provide credibility to the product in the eyes of a 22- or 24-year-old.”

Jerome Reisman, a partner with Reisman Peirez Reisman Capobianco in Garden City, N.Y., said it was irresponsible of the company to be so vague about the reasons for Mr. Zimmer’s departure.

“When you are a public company, when you have shareholders, when you report to the media, you have a duty to disclose the cause of any major material termination,” he said. “Zimmer, at all times, was the poster boy for this company — what Frank Perdue was to Perdue Chickens, what Tom Carvel was to the Carvel Ice Cream Company.”

The lack of details spawns speculation, Mr. Reisman said: “Is there more behind all of this? Is there a reason for shareholders to have fear? And the last thing you want from public shareholders is fear and the unknown.”

In its statement, the company said the board expected “to discuss with Mr. Zimmer the extent, if any, and terms of his ongoing relationship with the company.”

Mr. Jaffe said he did not expect Mr. Zimmer’s departure to affect the company, given the succession plan Mr. Zimmer had already put in place. The company maintains the legal right to his image and 500 hours of film of Mr. Zimmer, Mr. Jaffe said in a note to clients.

Men’s Wearhouse stock was down 1.2 percent, to $37, at the close of trading.

Article source: http://www.nytimes.com/2013/06/20/business/dumping-the-face-and-founder-of-mens-wearhouse.html?partner=rss&emc=rss