Following-up on some clues left in its annual report filed with the Security and Exchange Commission in April, Men’s Wearhouse Inc. (MW) said on Wednesday that it has terminated George Zimmer from his position as Executive Chairman. No reasons were cited for firing the bearded man that has been the face of the company on television advertisements for years.
In a brief press release, the Freemont, California-based company only said that they will be talking with Zimmer to discuss “the extent, if any, and terms of his ongoing relationship with the company.” Generally speaking, press releases disclosing terminations or resignations contain commentary from the company thanking the person for their time and efforts.
In Men’s Wearhouse’s SEC filing on April 3, the company listed retention of key personnel as a “risk factor.” More precisely, the report read, “Our success depends upon the personal efforts and abilities of our senior management team and other key personnel. George Zimmer has been very important to the success of the Company and is the primary advertising spokesman. Although we believe we have a strong management team with relevant industry expertise, the extended loss of the services of Mr. Zimmer or other key personnel could have a material adverse effect on the securities markets' view of our prospects and materially harm our business.”
Zimmer opened the first Men’s Wearhouse store in 1973 in Houston, Texas. Zimmer became well known for his tag line, “You’re going to like the way you look. I guarantee it.”
Zimmer holds about a 3.5 percent stake in the company.
Men’s Wearhouse operates 1,143 stores in North America under several brands, including The Men’s Wearhouse, Moores, Men’s Wearhouse and Tux and K&G. The company also sells uniforms and workwear through the Twin Hill brand in the U.S. and Dimensions, Alexandra and Yaffy brands in the U.K.
The apparel retailer also said it’s postponing it annual shareholder meeting that was scheduled for today at 11 AM PDT as a result of Zimmer’s termination. Instead, the company is using the time to re-nominate the existing slate of directors.
Last week, Men’s Wearhouse reported profits in the first quarter improved by 23 percent compared to the same period in 2012. The company tallied Q1 sales of $616.54 million, up from $586.57 million the year prior. Quarterly earnings were $33.1 million, or 65 cents per share, compared to $26.9 million, or 52 cents per share, a year earlier. Both sales and earnings beat Wall Street expectations.
Shares of MW gapped down nearly 10 percent from Tuesday’s closing price of $37.50 at the opening bell Wednesday upon the news of Zimmer’s ousting, but have recovered to the area of $36.50 heading towards the lunch break. So far in 2013, shares have advanced about 21 percent through Tuesday’s close.