The Men's Wearhouse (MW) shouting match keeps escalating. On Tuesday the company issued a press release clarifying the reasons behind its decision to unceremoniously "terminate" company founder George Zimmer and cancel its shareholder meeting last week.
"Our actions were not taken to hurt George Zimmer," the company said, by way of opening a statement characterizing Zimmer as an out-of-touch, bitter man. "Mr. Zimmer had difficulty accepting the fact that Men's Wearhouse is a public company with an independent Board of Directors and that he has not been the Chief Executive Officer for two years."
With a hysterical lack of ironic intent, the board's 666 word statement concludes by taking credit for creating an "open door culture that values every voice."
Now Zimmer is fighting back. In an open letter released Wednesday evening, the embattled ex-spokesperson took exception to almost everything the company's board has said about him and his departure.
"Just one month after the directors unanimously nominated me for reelection to the Board, last week they abruptly fired me from my management role and postponed the Annual Stockholder Meeting so they could nominate a new slate of directors that excluded me. To justify their actions, they now have tried to portray me as an obstinate former CEO, determined to regain absolute control by pushing a going private transaction for my own personal benefit and ego. Nothing could be further from the truth" [emphasis his].
Zimmer says his role in the board room was to look out for shareholders and employees by simply pushing for the directors to explore strategic alternatives for the company as a whole rather than piecemeal sales of individual divisions.
As the mudslinging continues the question for shoppers and investors is whether or not the company is better off without its founder. Brian Sozzi, head of Belus Capital Advisors, thinks existing management made the right call despite the outcry from those sympathetic to Zimmer. "If I'm a shareholder, I think the board took strong action to keep this guy — who was probably ruffling some feathers — out of the mix."
The company's stock price is right back where it was prior to Zimmer's ouster. The board has yet to explain why it was necessary to cancel the shareholder meeting when it fired Zimmer. As far as they're concerned, the unfortunate termination of the company founder is water under the bridge.
What is beyond question is that the company has horribly bungled Zimmer's departure. Transitions of power shouldn't be this controversial. The standard operating procedure in such matters is to have disagreements and arguments take place behind closed, boardroom doors, then issue a press release allowing the departing CEO to retain some dignity.
Men's Wearhouse continues to defend itself by taking shots at a man the public clearly likes. Zimmer founded Men's Wearhouse forty years ago. There are now over 1,100 stores, including Moore's and K&G stores.
Zimmer's reputation is the only thing emerging from this mess intact. Whether or not the company can flourish without its founder and guiding light remains to be seen, but the current management is off to a lousy start.
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