Retail • Board gives no reason for ousting him as executive chairman.
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New York • Men's Wearhouse's board on Wednesday fired George Zimmer, the founder and public face of the company, as executive chairman without saying why and delayed its annual shareholder meeting.
Zimmer, who appeared in many of its TV commercials with the slogan "You're going to like the way you look. I guarantee it," told CNBC that the board had "silenced his concerns" about the company's direction.
In a terse release issued Wednesday, Men's Wearhouse gave no 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 North America's largest specialty men's clothiers with 1,143 locations.
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.
The news shocked analysts and corporate governance experts, who tried to speculate what happened.
"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.
Zimmer, who handed over his CEO title to Douglas Ewert in 2011, was the company's personable, down-to-earth face, his slogan almost a cultural touchstone.
As of Wednesday afternoon, the company's website still prominently spotlighted Zimmer, calling him "The Man Behind The Brand" and linking to YouTube videos of "the man in action." But by later in the day his image had been removed.
The abrupt departure comes a week after Men's Wearhouse reported that its fiscal first-quarter profit increased 23 percent, helped by stronger profit 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.
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.
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 nearly 2 percent, or 65 cents, to $36.82 in early afternoon 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 company, based in Fremont, Calif., also runs the Moores and K&G retail chains. It also sells uniform and work wear in the U.S. and U.K.