Men’s Wearhouse founder firing: What happened?
Here’s an odd scenario: A company kicks out its figurehead when the stock is up and it, by all accounts, seems to be doing well.
Men’s Wearhouse (MW) announced on Wednesday that co-founder and executive chairman George Zimmer was terminated. It was supposed to be the day of the company’s annual shareholder meeting, which has been postponed.
Zimmer started the company, selling sports coats and slacks in 1973 out of his first, Texas-based store. He’s also the face and voice of the company’s tagline, “You’re going to like the way you look, I guarantee it.”
This is not the typical leadership tumult of a troubled company with activist investors or a crumbling board. Men’s Wearhouse seems to be a solid company, actually. This year, it was in the top 50 of Fortune’s 100 Best Companies to Work For.
By other financial metrics, Men’s Wearhouse is doing great. The company reported improved profits in its first-quarter earnings call last week, and its stock is up, year-to-date, by 18.4%. As of Wednesday afternoon, a share of Men’s Wearhouse cost about $37.
But behind the pleasant numbers, no one really knows what’s going on inside the company. Men’s Wearhouse has been tight-lipped so far — it had no further comment when Fortune contacted the company Wednesday.
According to Mark Jaffe, president of executive search firm Wyatt & Jaffe, there are three possibilities. First, the company could be angling for an image change. “Zimmer is 64 … which is like 179 in retail years,” Jaffe says. “To survive a brutally declining environment, stores continue to chase after an increasingly youthful group of consumers.”
Reason No. 2: he was fired because he did something that was grounds for termination that only internal people know about.
Yet another reason? Zimmer has been winding down his role at Men’s Wearhouse. In 2011, he relinquished the CEO job to Douglas Ewert. Zimmer could have had a tough time loosening his grip on the controls, Jaffe suggests. “Letting go is hard to do, particularly for someone who built an empire from the ground up.”
Zimmer issued the following statement Wednesday afternoon: “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.”
Whatever the reason, investors don’t seem too spooked. Men’s Wearhouse stock dipped only by about 2% following the announcement. Perhaps Zimmer’s stepping back from the spotlight was effective enough that his departure won’t significantly affect the company.
The company will need to find a new spokesperson. Already today, Men’s Wearhouse’s web team has been cracking. George Zimmer was previously featured on the company’s home page. As of 2:30 p.m. EST on Wednesday, that link is gone.