(Reuters) - Apparel retailer Men’s Wearhouse Inc MW.N fired Executive Chairman George Zimmer, the face of the company he founded 40 years ago, sending its shares down as much as 6 percent.
Men’s Wearhouse, in a terse statement on Wednesday, gave no reason for his dismissal but Zimmer accused the board of trying to silence him for expressing concerns about the direction of the company he started in Texas in 1973.
“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...”, he said in a statement after the company announced his surprise ouster.
Zimmer did not provide any details about his concerns.
Men’s Wearhouse also said it had postponed its annual shareholder meeting scheduled for Wednesday in order to renominate existing directors without Zimmer.
“The board expects to discuss with Mr. Zimmer the extent, if any, and terms of his ongoing relationship with the company,” Men’s Wearhouse said.
The company’s statement made no mention of Zimmer’s history with the retailer or his contribution to the company.
Efforts to reach Zimmer, who said he had been expressing his concerns over several months, were unsuccessful.
A query posted on the “Ask George” section of the company’s website, did not elicit an immediate response.
The bearded, raspy-voiced Zimmer, 64, has appeared in the company’s commercials since 1985 and is known for his line: “You’re going to like the way you look. I guarantee it.”
The retailer said in its annual report in March that he was central to its public image and advertising.
“ ... 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,” the annual report said.
However, Stifel Nicolaus analyst Richard Jaffe said Zimmer’s departure would probably not have a big impact on the company as it has the legal right to his image and 500 hours of footage.
“We believe he has been easing himself out of day to day work over the last year,” Jaffe wrote in a note. He speculated that Zimmer may have had difficulty letting go of leadership of the business, and that this had led to conflict with the board.
Men’s Wearhouse shares recovered much of their early losses to be down less than 2 percent at $36.82 at midday on the New York Stock Exchange. The stock had risen about 19 percent this year up to Tuesday’s close.
Men’s Wearhouse, based in Fremont, California, operates more than 1,100 stores under the Men’s Wearhouse, Moores and K&G banners.
The company, which had annual sales of $2.38 billion in 2012, reported better-than-expected results in its most recent quarter, with sales rising more than 5 percent to $616.5 million.
“I founded this company 40 years ago on the belief that employees should enjoy coming to work every day,” Zimmer said in a January 17 statement after Fortune magazine included the company on its list of “100 best companies to work for.”
Zimmer’s 3.52 percent stake in Men’s Wearhouse as of March 31 made him the largest individual shareholder, and seventh-biggest shareholder overall, according to Thomson Reuters data.
He was president from 1974 to 1997 and chief executive from 1991 until June 2011 when he became executive chairman.
A well-known proponent of legalizing marijuana, Zimmer was also an independent director at for-profit education provider Apollo Group Inc APOL.O from 2006 until March 21 this year.
Additional reporting by Aditi Shrivastava in Bangalore and Nadia Damouni and Phil Wahba in New York; Editing by Roshni Menon and Ted Kerr