Mens Warehouse Zimmer, Men’s Wearhouse no longer likes the way George Zimmer looks. Zimmer, the founder, chairman and the public face of the discount apparel chain, has been terminated by the company, according to a brief statement from the company. Men’s Wearhouse gave no reason for Zimmer’s departure — which surfaced on Wednesday, just hours before the company postponed its annual shareholders meeting. A company spokesman declined comment but said Zimmer’s departure would not affect operations.
Since 1985, Men’s Wearhouse TV ads featured the baritone-voiced Zimmer with his signature slogan: “You’re going to like the way you look. I guarantee it.”
The former substitute school teacher built Men’s Wearhouse from a lone Houston, Tex., store into one of the nation’s largest men’s specialty retailers, with 1,239 stores under the Men’s Wearhouse, Moores, K&G and Tux brands.
In a statement, Zimmer said in the past several months, he had expressed his concerns about the direction of the company to the board of directors and that the board had “chosen to silence” him.
Zimmer’s ouster comes less than a week after Men’s Wearhouse reported a 25% gain in first-quarter earnings on a 5% sales increase. After falling about 16% in 2012, shares were up about 20% so far this year before Wednesday’s announcement. Shares were down 2.5% to $36.50 in early afternoon trading.
Zimmer, 64, served as CEO from 1991 until 2011, when he was named executive chairman. According to the company’s latest proxy, he holds a 3.5% stake.
Richard Jaffe, a retail analyst at Stifel & Co., says Zimmer’s abrupt departure came as a surprise. Jaffe, who has a buy rating on the company, says Zimmer’s transition from hands-on manager to executive chairman may have hastened his ouster.
“We believe that despite Zimmer’s planned transition to a smaller role at the
company, he had difficulty letting go of the reins and the leadership of the
business,” Jaffe said. “We believe that this led to a conflict with the board and his subsequent termination.”
Zimmer earned nearly $2 million last year in pay, bonuses and other compensation. Men’s Wearhouse will owe Zimmer $250,000 annually for four years under a licensing deal for his image in advertising and marketing efforts, according to the proxy. He’s also due termination pay and benefits valued at about $2.7 million.