George Zimmer, founder and executive chairman of The Men’s Wearhouse, Inc. (NYSE:MW) was ousted from his position by the board of directors of the company. Zimmer served as the face of the specialty retailer of men’s apparel as he appeared in many of its television commercials saying the famous tagline, “You’re going to like the way you look. I guarantee it.”
Announcement for Termination of Zimmer
The Men’s Wearhouse, Inc. (NYSE:MW) announced the termination of Zimmer on Wednesday morning during its scheduled annual shareholders meeting. The company postponed the annual meeting but did not provide a new date. The company explained that the purpose of rescheduling the annual meeting is to “re-nominate the existing slate of directors without Zimmer.”
Exclusive: Third Point Expands Private Equity Business With New $300 Million Fund
Dan Loeb's Third Point recently completed the first close for TPVC, its new dedicated private growth-stage fund. The $300 million fund is part of Third Point's private investing strategy. At the end of February, Third Point managed $16.5 billion overall for clients around the world. New talent According to an investor update dated March 5th Read More
The board of directors of The Men’s Wearhouse, Inc. (NYSE:MW) did not provide any reason for the sudden termination of Zimmer in their press statement, which said they expect to discuss with Zimmer “the extent, if any, and terms of his ongoing relationship with the company.”
A report from Susanna Kim of ABC News quoted a statement from Zimmer. He said, “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. 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, the Board has inappropriately chosen to silence my concerns by terminating me as an executive officer.”
In a note to investors, Stifel Nicolaus analyst Richard Jaffe noted that Zimmer reduced his role in the men’s specialty retailer chain over the past two years. He appointed Doug Ewert as CEO in 2011 and Joseph Abboud as chief creator director last year.
“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. We believe that this led to a conflict with the board and his subsequent termination,” commented Jaffe.
In addition, Jaffe said that the management of The Men’s Wearhouse, Inc. (NYSE:MW) has been coincidentally reviewing the effectiveness of Zimmer as spokesperson of the company particularly with millennial consumers. Jaffe also believed that the current management is running the men’s specialty retail chain effectively and will continue to do so.
Jaffe said, “While we believe near term uncertainty exists as Men’s Wearhouse responds to a difficult macro-economic environment, we remain positive on the long term viability of the company, and at the current stock price, the risk/reward is attractive.”