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Continued: Men's Wearhouse escalates battle with founder, but are they winning the fight with shoppers?

  • Article by: ANNE D'INNOCENZIO , AP Retail Writer
  • Last update: June 25, 2013 - 4:40 PM

Robert Passikoff, president of Brand Keys Inc., a New York customer research firm, agrees.

"Airing boardroom dirty laundry doesn't work for consumers," said Passikoff. "It matters internally, not externally. The reason people are reacting emotionally is because they bonded to the brand via the man."

Founders who have wanted to gain back some control have found mixed success. Last year, Best Buy's co-founder and former Chairman Richard Schulze considered making a buyout bid for the electronics retailer but never made a formal offer. In March, he returned to the Best Buy fold as chairman emeritus.

A key difference from Zimmer's situation: Schulze owned 20 percent of Best Buy. But his quest to regain control also didn't register with shoppers because he wasn't the public face of the brand.

On Tuesday, Men's Wearhouse's Facebook page was covered with hundreds of comments from shoppers who lashed out at the company for ousting the founder. Many said they would stop shopping there.

Men's Wearhouse said Tuesday that it didn't want a total breakdown of its relationship with Zimmer and that it wasn't trying to hurt him. The company said it made "considerable efforts" to find a solution that kept Zimmer involved in the business, but that he wouldn't accept anything other than full control.

Men's Wearhouse also said Zimmer, who had initially supported looking at strategic options for the company's K&G stores, did an about-face and began objecting to the review process.

The retailer announced a strategic review of K&G three months ago. The division accounts for about 15 percent of the retailer's total revenue. It operates stores in largely urban markets that cater to low-income shoppers, who have faced more pressures recently due to the tough economy. K&G's business has declined.

Under Zimmer's stewardship, Men's Wearhouse Inc. grew from one small Texas store using a cigar box as a cash register to one of North America's largest men's clothing sellers with 1,143 locations.

Like many clothing retailers, Men's Wearhouse saw its sales and profits battered during the Great Recession, but over the past two years, business has been recovering. For the latest year ended Feb. 2, revenue rose more than 4 percent to $2.48 billion. Net income rose over 9 percent to $131.7 million.

Shares of Men's Wearhouse climbed $2.00 or 5.7 percent, to close at $37.13. The stock has traded between $25.97 and $38.59 over the past year.

Men's Wearhouse should be hoping for more shoppers like Johnathon Fitzpatrick, who doesn't plan to boycott the chain.

"I have this attachment from growing up seeing him," said Fitzpatrick, 29, from Seattle. "But it's not going to affect my shopping. Price will — and service."

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