Men's Wearhouse Inc. no longer likes the way it looks, which is bad for George Zimmer. But don't feel bad, the CEO and founder won't need to looks for warehouse jobs anytime soon.
The company issued a brief statement Wednesday to announce the firing of executive chairman and co-founder George Zimmer, who has promised millions of men over the years, "You're going to like the way you look. I guarantee it."
Its play on the term warehouse gave the company an everyman feel.
No reason was given for the surprise dismissal of the man who built Men's Wearhouse from one Houston location into one the country's largest specialty men's clothiers, with 1,143 locations. The Fremont, Ca.-based company, which also runs the Moores and K&G retail chains, earned $2.48 billion in revenue during the fiscal year that ended Feb. 2. In its first fiscal-quarter this year, Men's Wearhouse's increased 23 percent, helped by stronger margins and an earlier prom season.
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"This is very rare to fire a founder," Eleanor Bloxham, CEO of The Value Alliance, a board advisory firm, told The Associated Press. "Founders are generally entrenched in the company."
Ken Dennard, a Men's Wearhouse spokesman, declined to comment to Bloomberg News beyond the statement.
Men's Wearhouse also postponed its annual shareholders meeting, originally scheduled for Wednesday, "to re-nominate the existing slate of directors without Mr. Zimmer," and will discuss Zimmer's "ongoing relationship" with the company.
Zimmer, 64, shed his CEO title in 2011, but remained a personable presence with a recognizable slogan. He had been a prominent part of the company's website as "The Man Behind The Brand." He started the company in 1973, and sold $10 slacks and $25 polyester sport coats.
The first TV commercials aired in 1970s, and Zimmer made his first appearance in 1986. In a 2010 interview with Forbes magazine, he credited the ad agency Red Ball Tiger with coming up with his "I guarantee it" slogan in 1997, geared towards self-conscious men.
With a focus on large markets where businesses were slow to capitalize on lower real estate costs, Men's Wearhouse expanded. With that came more products, such as casual sportswear and tuxedo rentals.
According to a May 9 proxy filing, Zimmer owned 1.8 million shares, or a 3.5 percent stake in the company. As of the stocks market close on Tuesday, the company is up about 20 percent in 2013.
"Why would the board terminate him?" Stifel Financial Corp. analyst Richard Jaffe told Bloomberg News. "My sense is that he was reluctant to let go, and that would make sense. He's not a mild-mannered and unassuming guy
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Zimmer isn't the first founding CEO to be fired by his company. The list also includes: Groupon's Andrew Mason, Jet Blue's David Neelman, Yahoo!'s Jerry Yang, Etsy's Rob Kalin, Chesapeake Energy's Aubrey McClendon and Apple's Steve Jobs, in 1985.
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