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Men's Wearhouse ousts founder Zimmer

(Reuters) - Apparel retailer Men's Wearhouse ousted Executive Chairman George Zimmer, the face of the company founded 40 years ago, sending its shares down as much as 6 percent.

The company, which gave no reason for the dismissal, also postponed its annual shareholder meeting scheduled for later on 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 in a terse statement.

Company spokesman Ken Dennard said he had no comment beyond what was in the statement.

Efforts to reach Zimmer were unsuccessful. A query posted on the "Ask George" section of the company's website, did not elicit an immediate response.

Zimmer, 64, has appeared in his own 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 Zimmer 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."

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, founded in 1973, operates more than 1,100 stores under the Men's Wearhouse, Moores and K&G banners.

It reported higher-than-expected results in its most recent quarter, with sales jumping more than 5 percent to $616.5 million. The company had sales of $2.38 billion in 2012.

"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 was the company's single-largest individual shareholder as of March 31 with a stake of 3.52 percent, according to Thomson Reuters data.

The bearded, raspy-voiced Zimmer 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 from 2006 until March 21 this year.

Shares of the company, based in Fremont, California, were down about 2 percent at $36.77 in late morning trading on the New York Stock Exchange.

(Reporting by Siddharth Cavale and Aditi Shrivastava in Bangalore; Editing by Roshni Menon)

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