Zimmer strikes back again
Fremont, Calif. – George Zimmer, the founder and executive chairman of Men’s Wearhouse who was stripped of his executive chairman title last week and has been engaging in a war of words with the retailer ever since, continued his verbal battle in an open letter released on June 26.
"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," Zimmer said in the statement. "Nothing could be further from the truth."
Zimmer stated that he raised the idea of selling Men’s Wearhouse in a private transaction as one possible action earlier this year, but the board immediately rejected the idea without seeking professional financial advice and went on to try to marginalize and silence him.
Men’s Wearhouse has not publicly responded to Zimmer’s letter, but earlier this week released a statement saying that Zimmer was removed not to hurt him, but because he could not accept his role at the company.
The text of Zimmer’s open letter follows.
From George Zimmer
June 26, 2013
Since 1973 when I opened the first The Men’s Wearhouse store in Houston, with the help of tens of thousands of current and former employees, we have built a multi-billion dollar company based on two guiding principles. The first is to serve customers by delivering value and an enjoyable shopping experience and the second is to embody the values of servant leadership by trusting and empowering our employees to create that experience. I believed that if we did these things right, customers would be satisfied, employees would feel appreciated and motivated and shareholder value would be created. And, in fact, all this has happened.
Over the years, as CEO, I consistently encouraged the company to take a longer term approach of investing most of our profits back in the company, delivering value to our customers and building a loyal and dedicated workforce totally committed to service, rather than pursuing shorter term strategies based on financial engineering. Inside the Boardroom, we often had spirited discussions about how best to achieve these objectives. Regardless of whether the Board eventually sided with my point of view or not, I believe this dialogue and discussion led to better decisions that contributed to the success of The Men’s Wearhouse.
Unfortunately, this dynamic seems to have changed.
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.
The reality is that over the past two years, and particularly over recent months, I believe that the Board and management have been eroding the principles and values that have made The Men’s Wearhouse so successful for all stakeholders.
Earlier this year, concerned with the Board’s response to the short term pressures of Wall Street, I encouraged the Board to at least study a broader range of strategic alternatives beyond simply selling the K&G division, including the possibility of a going private transaction. Rather than thoughtfully evaluating the idea or even checking the market to see what value might be created through such strategic alternatives, the Board quickly and without the assistance of financial advisors simply rejected the idea, refused to even discuss the topic or permit me to collect and present to the Board any information about its possibilities and feasibility, and instead took steps to marginalize and then silence me.
Such behavior by the Board does not strike me as consistent with sound principles of good corporate governance or the core values of The Men’s Wearhouse, but instead suggests that the directors were more concerned with protecting their entrenched views and positions than considering the full range of possibilities that might benefit our shareholders and indeed all our stakeholders.
To be clear, at this point I have not concluded that taking The Men’s Wearhouse private is a better means of preserving the unique culture and values that have made the company so successful over the years. What I do know is that as a founder and large shareholder, I am greatly concerned about the future of the company if this culture and these values are lost, and believe that the Board should be open to at least consider the full range of possibilities that could optimize the future value of the company for all stakeholders.
To the countless employees who have attempted to contact me over the past week, I appreciate your kind gestures and support. I am so very proud of the company we built together and nothing will change that. I encourage you to stay focused on serving your customers and maintaining your jobs. Please do not concern yourselves with my well-being at the risk of your own.
NRF asks for healthcare reform delay
Washington, D.C. – Neil Trautwein, VP and employee benefits policy counsel of the National Retail Federation, told a congressional panel today that retail and chain restaurant companies continue to have serious concerns about the Patient Protection and Affordable Care Act and remain worried by the quickly approaching deadlines for full healthcare reform implementation, anticipated for January 2014.
“Our nation — particularly employers — cannot afford for the ACA to stumble out of the starting gate,” Trautwein said in prepared testimony. “We fear that as time diminishes between now and January 2014, a cascade of additional last minute regulations will create added confusion and thus could encourage more employers to back out of coverage.”
Trautwein is scheduled to testify before a hearing of the U.S. House of Representatives Energy and Commerce Subcommittee on Oversight and Investigations on the “Challenges Facing America’s Businesses Under the Patient Protection and Affordable Care Act.” There he will present the NRF’s view that Congress should mitigate the potentially adverse impact of the ACA on retailers by redefining full-time coverage eligibility to 40 hours, and reiterate NRF’s call on Congress and the administration to delay ACA implementation for up to one year.
Catalog Spree adds brands to mobile shopping app
Los Altos, Calif. – Catalog Spree, which promotes itself as a “digital mall” providing online access to retail catalogs, has added several brands to its mobile shopping app. Retailers — including Forever 21, JC Penney, Kohl’s, Target, Toms Shoes, Torrid and Urban Outfitters — now have Catalog Spree “lookbooks” that provide online browsing of catalog-style product selections. Catalog Spree also has added a price watch feature that sends users automatic notifications when prices on desired goods drop to a certain point.
"Fashion retailers have long faced a challenge in delivering highly-engaging content to mobile devices, especially tablets," said Joaquin Ruiz, CEO of Catalog Spree. "The traditional utilitarian online shopping mentality of ‘search-find-buy’ does not offer the same enjoyment and satisfaction that teens and young women get when discovering new fashion, trends or inspiration through a very visual and lifestyle medium — such as a lookbook or a catalog. By creating exclusive lookbooks for these popular brands, and many more to come, Catalog Spree delivers that desired visual experience."