The Deal: Men's Wearhouse Fires Founder in Course of Review
NEW YORK (The Deal) You may not be seeing George Zimmer, co-founder of Men's Wearhouse Inc.
That's because the Houston-based retailer of men's clothing fired Zimmer, who co-founded the company in 1973.
The company said in a Wednesday statement that its "board expects to discuss with Mr. Zimmer the extent, if any, and terms of his ongoing relationship with the company."
Men's Wearhouse said it would postpone its annual shareholders meeting, which was also scheduled for Wednesday, so that shareholders could go ahead with electing board directors -- minus Zimmer.
Zimmer told CNBC, in response to his firing: "Over the last 40 years, I have built MW into a multibillion-dollar company with amazing employees and loyal customers who value the products and service they receive at MW. Over the past several months I have expressed my concerns to the board about the direction the company is currently heading. 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 through termination as an executive officer."
Zimmer held a 3.81% stake in the company as of April 2012, according to data provided by Thomson Reuters.
Men's Wearhouse hired investment bank Jefferies LLC in March to conduct a strategic review, including a potential sale, of its K&G retail unit. Comparable store sales at the unit had declined 5.7% year-over-year for the fourth quarter ended Feb. 2.
But if other similar situations in the retail sector are any guide, a strategic review of a subsidiary can lead to a sale of the entire company.
That's exactly what happened to Charming Shoppes Inc.
In some instances, a potential sale could be bolstered with the departure of a key executive or founder, clearing the way for a new owner or new management.
Recently, True Religion Apparel Inc.