UPDATE: Men's Wearhouse nixes Jos. A. Bank offer
Zimmer "refused to support" a management team that replaced him unless they "acquiesced to his demands," the board statement released Tuesday said. He "expected veto power over significant corporate decisions (including executive compensation), and reversed his longstanding position against taking the company private," it said.
COMPANY: June 25 statement from Men's Wearhouse board of directors
Shares of Men's Wearhouse jumped 5.7% Tuesday to close at $37.13. The 52-week trading range of the stock is $25.97 to a peak of $38.59.
Zimmer, 64, was abruptly fired as the company's executive chairman a week ago in a terse statement with no details. On Monday, he submitted a letter resigning from the board. The Associated Press reported he was not immediately available for comment Tuesday.
Zimmer, who owns about 3.5% of the company's shares, is one of TV's most recognizable pitchmen in company ads that almost always appeared during televised NFL games and featured the slogan: "You're going to like the way you look. I guarantee it."
Zimmer's resignation letter says it's clear from his firing that the board is determined to avoid addressing his growing concerns with recent board decisions and the company's direction.
ZIMMER: Story on June 19 firing of company founder
In the lengthy response, the board charged that not only had Zimmer refused to work with the new management team and argued for sale to an investment firm, he had tried to undermine company efforts to have an outside firm review strategic options.
Doug Ewert replaced Zimmer as CEO more than two years ago. Zimmer seemed to have difficulty "accepting the fact that Men's Wearhouse is a public company with an independent board of directors," the statement said. "T! he board is unanimously of the view that now is not the time to sell the company. ... Our actions were not taken to hurt George Zimmer."
"Reminds me of when the Gap fired Mickey Drexler," says Eric Gustavsen, a principal at Graj & Gustavsen brand imaging firm. "They brought in a leader who was not a merchant and it took them over 10 years to right the ship. ... Mickey went on to build J. Crew and Madewell."
Some financial analysts have speculated that the company split with Zimmer in an attempt to appeal to a younger demographic. According to online daily branding research firm YouGov, Men's Warehouse had an edge in purchase consideration with Millennials, ages 19-34, that began to erode in December.
According to YouGov's brand index, Men's Warehouse continues to outperform competitors with shoppers 35 and older. However, so far in 2013, menswear brands sold at Joseph A. Bank, Nordstrom, Macy's and Lord & Taylor have pulled ahead in wooing Millennials.
Financials don't yet reflect that. Same-store sales were up 7.1% year-over-year in the fiscal first quarter reported June 12 and profits increased 23%, the company said. Revenue and profit gain have been on the upswing the past two years after recovering from the hammering the company and its rivals got during the Great Recession.
"They can certainly be successful with or without George Zimmer if they do a great job: stay true to their brand, continue to deliver value and style, and forge great relationships with their customers," Gustavsen says.
Zimmer built Men's Wearhouse from one small Texas store using a cigar box as a cash register to one of North America's largest men's clothing sellers, with 1,143 locations.
Beyond creating a successful men's retail chain, Zimmer is known as something of a cowboy in the business world. He added spiritual leader Deepak Chopra as a board member in 2004 and spent millions of his own money in 2010 supporting California's failed Proposition 19 to legalize marijuana. Men! 's Wearho! use also didn't conduct criminal background checks on hires because Zimmer believes everyone deserves a second chance.
Contributing: USA TODAY's Ben Mitchell, Jayne O'Donnell, The Associated Press
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