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News - Men’s Wearhouse Amid “Fire”

Jun/2013

26

Men’s Wearhouse Amid “Fire”

 The man behind Men’s Wearhouse and its iconic tagline, “You’re going to like the way you look. I guarantee it,” has been fired.

Men’s Wearhouse founder George Zimmer, who built the retailer into a chain with more than 1,000 stores and became its public face, said he was fired after raising concerns about the company’s strategy.  Strangely, the retailer announced his termination as Executive Chairman last week in a three-paragraph statement that didn’t include a reason for the dismissal.

“Over the past several months I have expressed my concerns to the board about the direction the company is currently heading,” Mr. Zimmer said in a statement. “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.”

The firing leaves the Houston-based company without the man who founded the company in 1973 and stars in its commercials. According to company filings, the retailer had a license agreement with Mr. Zimmer that allowed it to use his face in connection with advertising and marketing, so long as he was an employee, for an annual fee of $10,000. Now that Mr. Zimmer is no longer an employee, Men’s Wearhouse would have to pay up, to the tune of $250,000 per year, if it wants to continue using him in commercials. 

That figure seems a high price to pay, considering the retailer spent $56 million on media in 2012, up 24% from 2011, according to Kantar Media.

Mr. Zimmer opened the first Men’s Wearhouse in Houston with his college roommates, selling $10 pants and $25 polyester sport coats, according to the company’s website. He began appearing in the company’s commercials in 1986, with a focus on the company’s bargain prices. The well-known line delivered in Mr. Zimmer’s distinctive voice was created by ad agency Red Ball Tiger in 1997, and has become well-known in the world of retail ever since.

Mr. Zimmer still owns about 3.5% of the company’s shares, making him the seventh-largest shareholder, according to data compiled by Bloomberg.

Because of the firing, Men’s Wearhouse postponed its annual shareholder meeting, so it could re-elect its Board of Directors without Mr. Zimmer. The company also said the board expects to discuss with Mr. Zimmer the extent and terms of his future relationship with Men’s Wearhouse.

The abrupt dismissal of Mr. Zimmer will likely set the tone of the consequences a company, no matter the size, can encounter when the branding of their face takes a hit, such as what has happened in the case of Men’s Wearhouse.

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