The acrimony grows deeper between Men's Wearhouse (NYSE:TLRD) and its ousted founder and chairman, George Zimmer, who published a sharply worded rebuke to the board of the men's clothier in response to their version of his firing.
The latest salvo follows Zimmer's abrupt firing around which Men's Wearhouse's board of directors offered no rationale. When the ousted founder told media it was due to a difference in vision for the company's direction, the board then unleashed on Zimmer in an SEC filing, painting him as a grasping control freak unable to let go the reins of power.
In the open letter Zimmer released yesterday, he forcefully refuted the notion that he was a difficult-to-work-with executive driven by ego to take the company private at all costs for his own personal gain. He said the proposal was merely one option out of several, particularly as an alternative to simply selling their discount K&G line, but the board shut him down and tried to marginalize him thereafter:
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.
With all this public airing of the dirty laundry, investors in the men's clothing retailer should hope that's the end of it. The company has had no response -- yet -- to the letter, but if they're smart, they'll let it go. The soiled sheets never look good hanging on the line.
Zimmer might yet still assail the ramparts of Men's Wearhouse by coming back with a buyout proposal, similar to what Richard Schulze did at Best Buy (NYSE:BBY) after he was deposed. He had to step down because he was aware of yet did not report an inappropriate relationship the company's CEO had, but then wanted to take the consumer electronics retailer private against the backdrop of a resistant board.
Of course, that would make the clothier's board look like they were right about their characterization of him, but they've also made it clear they're fairly opposed to any such idea. And, unlike Schulze, the rancor between the two sides at Men's Wearhouse appears too deep to have Zimmer return as its once and future chairman, as Schulze was -- at least not anytime soon.
Best Buy's board ultimately embraced him and gave him a title again, something it's hard to see happening now with Zimmer's cannon muzzle still red hot. We'll have to see if Men's Wearhouse lobs another volley his way, or decides, as it should, that discretion is the best course of action, and keeps its powder dry for another day -- or even welcomes him back with open arms.
Editor's note: A previous version of this article mistakenly implied that Schulze had to step down because of an inappropriate relationship he had had. The Fool regrets the error.
Fool contributor Rich Duprey has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.