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Feds charge 33 in gun, drug trafficking case
Jun 19, 2013 | 0 views | 0 0 comments | 0 0 recommendations | email to a friend | print
SAVANNAH — Federal authorities in Savannah unsealed 17 indictments on Wednesday charging 33 people as part of an undercover investigation of gun and drug trafficking. The investigation, dubbed Operation Pulaski, began in late 2011. Most of those charged in the indictments live in Georgia and South Carolina. Four other people face state gun and drug charges as part of the investigation, and another eight people were indicted and prosecuted last year. “Operation Pulaski was a relentless effort to remove illegal guns from the streets of our communities and to halt the illegal sale of guns, especially where the transactions were being conducted by violent criminals,” U.S. Attorney Edward J. Tarver said in a statement. “This undercover operation serves as notice to the criminal element that if you traffic in firearms, drugs, or stolen cars in this district, you will be apprehended and you will be prosecuted.” Undercover federal agents with the Bureau of Alcohol, Tobacco, Firearms and Explosives infiltrated multiple regional and international criminal organizations. Over time, the agents bought 189 guns, including handguns, assault rifles, sawed-off shotguns and machine guns; illegal drugs, including more than 200 grams of heroin and more than 4 kilograms of cocaine; and stolen vehicles. Investigators found that the vehicles were stolen from the New York City area and were brought to the Southeast for resale or to be shipped abroad and sold. Authorities believe 26 of those arrested are convicted felons. Eleven are believed to be in the country illegally. A number of the guns the undercover agents bought had also been reported stolen. Authorities made numerous arrests in the case on Tuesday and Wednesday, and some of those arrested are set to have their initial court appearances in federal court in Statesboro today. The investigation was a collaboration between the U.S. Attorney’s Office in Savannah, the ATF and the Savannah-Chatham Metropolitan Police Department, with additional investigative support from other agencies.
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DeKalb County CEO facing corruption charges says he’s done nothing wrong
Jun 19, 2013 | 0 views | 0 0 comments | 0 0 recommendations | email to a friend | print
DECATUR — The chief executive officer of one of Georgia’s largest counties, who is facing multiple corruption charges made public Tuesday, says that he’s done nothing wrong. DeKalb County CEO Burrell Ellis made a brief statement Tuesday night, hours after a 15-count indictment alleged that he threatened to withhold county business from companies that didn’t contribute to his campaign. On Tuesday night, Ellis surrendered to authorities and was released on a $25,000 bond. “I do want to make one statement emphatically to the good people of DeKalb County that I’ve done nothing wrong as I’ve said from the very beginning,” he told reporters at his home in Stone Mountain. “I would never, ever, ever do anything to violate the public trust,” he added. The indictment accuses Ellis of trying to extort campaign contributions from companies and their employees. The indictment also alleges that Ellis instructed the county’s director of purchasing and contracting to prevent certain companies from getting business because they didn’t respond to his solicitations and didn’t contribute to his campaign. Ellis’ lawyer, J. Tom Morgan, said by email Tuesday evening that he was reviewing the indictment. The indictment is the latest in a series of challenges facing the county, which includes many of Atlanta’s eastern and northeastern suburbs. Earlier this year, Georgia Gov. Nathan Deal removed six of the nine members of the DeKalb County school board following harsh criticism by the school system’s accrediting agency. The Southern Association of Colleges and Schools had placed the school district on probation after a six-month investigation. The accreditation agency cited long-term leadership issues including nepotism, fiscal mismanagement, inappropriate micromanagement and intimidation within the district, which is Georgia’s third-largest. If Ellis is suspended, that would make him the seventh elected official in the county to be in that situation since March. According to the indictment, Ellis tried in February 2012 to get a campaign contribution from a company called Ciber Inc., and an employee there. Ellis allegedly threatened the employee, saying he would contact the company’s CEO to say the county wouldn’t be giving him their business anymore because of the employee’s poor customer service, the indictment says. A spokeswoman for Ciber said Wednesday the company is aware of the investigation and has cooperated with authorities. She declined to comment further since the case is ongoing. In another case, the indictment alleges, Ellis threatened to withhold county business from Power and Energy Services, Inc., after two company officers didn’t respond to his campaign contribution requests and a third said the company wouldn’t give money in June 2012. Then in September, the indictment says, he instructed Kelvin Walton, the county director of purchasing and contracting, not to give the company any more work and to put a note in its file saying the firm didn’t return phone calls. In October, Ellis told Walton to prevent the National Property Institute, LLC, from receiving work from the county because the company didn’t respond to his requests for campaign contributions and didn’t send money, the indictment says. Because the company didn’t respond, Ellis ordered a county employee to arrange for and attend a meeting with the company during her working hours, the indictment says. Representatives Power and Energy and NPI couldn’t immediately be reached. At some point between Nov. 1, 2011, and Nov. 30, 2012, the indictment alleges, Ellis ordered Walton to use county board of commission meeting agendas and county purchasing and contract information and data to create lists of vendors that had county contracts. Three county contract assistants helped him create those lists. Walton and the three assistants did these tasks during working hours while being paid by the company, but the lists were meant to be used by Ellis to solicit campaign contributions, the indictment says. Walton is not under indictment and he did not immediately return a call seeking comment Tuesday evening. Ellis faces a variety of charges, including criminal attempt to commit theft by extortion, conspiracy in restraint of free and open competition, and theft by taking, among others. The office of county Commissioner Elaine Boyer said the commissioners were meeting individually with the county attorney for briefings on the situation and to determine what their next steps should be. “This is a sad day for DeKalb County,” DeKalb County Commissioner Lee May said in a statement on Wednesday. “While every person is clearly innocent until proven guilty, this ongoing saga has been a distraction and continues to bring unwelcome negative publicity to our county and government,” May said. Ellis was elected to a second term as county CEO in November. If Ellis resigns or is removed from office, the county election superintendent will have to call for a special election to replace him within 15 days, according to the county organizational act. The special election would have to be held no fewer than 29 days and no more than 45 days after the call. The presiding officer of the commission would fill in until a new CEO is elected. If Ellis remains in office, state law requires the governor to form a three-person panel to consider whether he should be suspended once the district attorney’s office sends him a copy of the indictment.
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The Associated Press<br>
George Zimmer, center, talks to Andy Dolich prior to a meeting in 2009. Men's Wearhouse Inc. says it has dismissed Zimmer, its founder and executive chairman. In a press release issued Wednesday, the company didn't give a reason for the abrupt firing of Zimmer, who built Men's Wearhouse from one small Texas store using a cigar box as a cash register to one of the nation's largest specialty retailers in men's clothing, with 1,143 locations.
The Associated Press
George Zimmer, center, talks to Andy Dolich prior to a meeting in 2009. Men's Wearhouse Inc. says it has dismissed Zimmer, its founder and executive chairman. In a press release issued Wednesday, the company didn't give a reason for the abrupt firing of Zimmer, who built Men's Wearhouse from one small Texas store using a cigar box as a cash register to one of the nation's largest specialty retailers in men's clothing, with 1,143 locations.
slideshow
Parting ways — Men’s Wearhouse ousts founder, pitchman
Jun 19, 2013 | 3 views | 0 0 comments | 1 1 recommendations | email to a friend | print
The Associated Press<br>
George Zimmer, center, talks to Andy Dolich prior to a meeting in 2009. Men's Wearhouse Inc. says it has dismissed Zimmer, its founder and executive chairman. In a press release issued Wednesday, the company didn't give a reason for the abrupt firing of Zimmer, who built Men's Wearhouse from one small Texas store using a cigar box as a cash register to one of the nation's largest specialty retailers in men's clothing, with 1,143 locations.
The Associated Press
George Zimmer, center, talks to Andy Dolich prior to a meeting in 2009. Men's Wearhouse Inc. says it has dismissed Zimmer, its founder and executive chairman. In a press release issued Wednesday, the company didn't give a reason for the abrupt firing of Zimmer, who built Men's Wearhouse from one small Texas store using a cigar box as a cash register to one of the nation's largest specialty retailers in men's clothing, with 1,143 locations.
slideshow
The Associated Press NEW YORK — Men’s Wearhouse doesn’t like the way its founder looks anymore. The men’s clothier said Wednesday that it has fired the face of the company and its executive chairman, George Zimmer, 64, who appeared in many of its TV commercials with the slogan “You’re going to like the way you look. I guarantee it.” The company announced the move in a terse statement that gave no reason for the abrupt firing of Zimmer, who built Men’s Wearhouse Inc. from one small Texas store using a cigar box as a cash register to one of the North America’s largest men’s clothing sellers with 1,143 locations. The firing appears to end the career of one of TV’s most recognizable pitchmen. Zimmer’s slogan became almost a cultural touchstone, and his natty but down-to-earth charm made dressing sharply feel more accessible to men. Zimmer said in a written statement that over the past several months he and the company’s board disagreed about the company’s direction. “Over the last 40 years, I have built The Men’s Wearhouse into a multi-billion dollar company with amazing employees and loyal customers who value the products and service they receive at The Men’s Wearhouse,” he said in a statement. But he noted that “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 by terminating me as an executive officer.” The bad blood spooked investors, who drove Men’s Wearhouse’s stock down 53 cents to $36.94. The stock is still near its 52-week high of $38.59 and ended Tuesday up about 20 percent since the start of the year. Beyond creating a successful company, Zimmer is known as something of a cowboy in the business world. He brought in spiritual leader Deepak Chopra as a member of the company’s board in 2004. He put his fortune to work behind California’s failed Proposition 19 in 2010, which would have legalized marijuana in California, where he lived. And Men’s Wearhouse didn’t conduct background checks on new hires because Zimmer believed that everyone deserves a second chance. “He’s one of a kind,” said Richard Jaffe, a Stifel Nicolaus analyst. “He’s an entrepreneurial visionary. ... He made looking terrific available for every man in America.” Zimmer declined to comment for the article through his personal publicist beyond the statement. Calls to company executives and board members were immediately referred to a company spokesperson, who declined to comment beyond the release. Jaffe speculated that Zimmer, who handed over his title as CEO to Douglas Ewert in 2011, may have had difficulty in letting go of the company’s reins. “Clearly, something happened abruptly and fairly dramatically,” he said. Jaffe also speculated that perhaps the company was looking for a new spokesman so it could target younger shoppers. Like many clothing retailers, Men’s Wearhouse saw its sales and profits battered during the Great Recession, but over the last two years the company’s business has been recovering. For the latest year ending Feb. 2, the company’s revenue rose 4.4 percent to $2.48 billion. Net income rose 5.3 percent to $131.7 million. The firing comes a week after Men’s Wearhouse reported that its fiscal first-quarter profit increased 23 percent. Three months ago, the company said it was conducting a strategic review of its K&G store division, which it acquired in 1999. The division, which accounts for about 15 percent of the company’s total revenue, is very promotional and has seen its business decline. Jaffe speculated that deciding what to do with that division could have been a point of contention. Still, a few other analysts and experts in executive recruiting said privately that the ousting could be something more than just wrangling over the direction of the company and pointed out that the timing of the announcement was odd. It happened the morning the company’s annual shareholder meeting had been set to take place. The company delayed the meeting but didn’t give a new date. The company said the purpose of postponing the annual meeting is to re-nominate the existing board of directors without Zimmer. It said the board expects to discuss with Zimmer the extent, if any, and terms of “his ongoing relationship” with the company, language that seemed to leave a small window open for him to remain an advertising spokesman. Also highlighting the suddenness of the firing: The company’s website still prominently spotlighted Zimmer for much of Wednesday, calling him “The Man Behind The Brand” and linking to YouTube videos of “the man in action.” The pages were still available by midafternoon, though a prominent link from the site’s front page had been removed. “This is very rare to fire a founder. Founders are generally entrenched in the company,” said Eleanor Bloxham, CEO of The Value Alliance, a board advisory firm. In 1971, fresh out of college, Zimmer made his first foray into the clothing industry, working in Hong Kong for six months as a salesman for his father’s coat manufacturing business, according to the company website. In 1973, he and his college roommate opened the first Men’s Wearhouse store, which sold $10 slacks and $25 polyester sport coats, in Houston. His personal car was a van with the company logo on the side and clothing racks in the back. The company aired its first TV commercial in the 1970s when commercials for clothing were rare. Zimmer starred in his first commercial in 1986, with the line “I guarantee it.” Men’s Wearhouse kept expanding, focusing on large markets where business was sluggish to take advantage of lower real estate costs. It also expanded beyond sports coats and trousers to casual sportswear in the 1980s and then went into the tuxedo rental business in 2000. The company went public in 1992, and the company has been cited by Fortune magazine as one of the top 100 best companies to work for. Zimmer owned 1.8 million shares of Men’s Wearhouse as of the company’s May 9 proxy filing, a 3.5 percent stake. The company, based in Fremont, Calif., also runs the Moores retail chains. It also sells uniform and work wear in the U.S. and U.K.
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Upward mobility, it’s not getting any easier ...
by George Will
Columnist
Jun 19, 2013 | 28 views | 0 0 comments | 1 1 recommendations | email to a friend | print
All men are by nature equal, But differ greatly in the sequel. A quarter of a millennium later, that couplet from a colonial American almanac defines an urgent challenge. Modern society increases how, and the predictability of how much, people differ in the sequel. If America is to be equitable, with careers open to all talents and competent citizens capable of making their way in an increasingly demanding world, Americans must heed the warnings implicit in observations from two heroes of modern conservatism. In “The Constitution of Liberty” (1960), Friedrich Hayek noted that families are the primary transmitters of human capital — habits, mores, education. Hence families, much more than other social institutions or programs, are determinative of academic and vocational success. In “The Unheavenly City” (1970), Edward C. Banfield wrote: “All education favors the middle- and upper-class child, because to be middle or upper class is to have qualities that make one particularly educable.” Elaborating on this theme, Jerry Z. Muller, a Catholic University historian, argues in the March/April 2013 issue of Foreign Affairs that expanding equality of opportunity increases inequality because some people are simply better able than others to exploit opportunities. And “assortative mating” — likes marrying likes — concentrates class advantages, further expanding inequality. As Muller says, “formal schooling itself plays a relatively minor role in creating or perpetuating achievement gaps” that originate “in the different levels of human capital children possess when they enter school.” The Cato Institute’s Brink Lindsey argues in “Human Capitalism: How Economic Growth Has Made Us Smarter — and More Unequal” that economic growth intensifies society’s complexity, which “has opened a great divide between those who have mastered its requirements and those who haven’t.” Modernity — education-based complexity — intensifies the demands on mental abilities. People invest increasingly in human capital — especially education — because status and achievement increasingly depend on possession of the right knowledge. Lindsey cites research showing that “by the time they reach age 3, children of professional parents have heard some 45 million words addressed to them — as opposed to only 26 million words for working-class kids, and a mere 13 million words in the case of kids on welfare.” So, class distinctions in vocabularies are already large among toddlers. Parental choices of neighborhoods and schools mean that children of college-educated parents hang out together. Such peer associations may have as much effect on a child’s development as do parents. These factors, Lindsey says, explain why “people raised in the upper middle class are far more likely to stay there than move down, while people raised in the working class are far more likely to stay there than move up.” In a historical blink, Lindsey says, humanity has moved from lives rooted in a remembered past to lives focused on an imagined future. This future orientation favors the intellectually nimble. “Who gets ahead, who struggles to keep up, and who gets left behind are now determined primarily by how people cope with the mental challenges of complexity.” And coping skills are incubated in families. Today, the dominant distinction defining socioeconomic class is between those with and without college degrees. Graduates earn 70 percent more than those with only high school diplomas. In 1980, the difference was just 30 percent. Soon the crucial distinction will be between those with meaningful and those with worthless college degrees. Many colleges are becoming less demanding as they become more expensive: They rake in money — much of it from government-subsidized tuition grants — by taking in many marginally qualified students who are motivated only to acquire a credential, and who learn little. Lindsey reports that in 1961, full-time college students reported studying 25 hours a week on average; by 2003, average studying time had fallen to 13 hours. Half of today’s students take no courses requiring more than 20 pages of writing in a semester. Given the role of practice in developing expertise, “the conclusion that college students are learning less than they used to seems unavoidable.” Small wonder those with college degrees occupying jobs that do not require a high school diploma include 1.4 million retail salespeople and cashiers, half a million waiters, bartenders and janitors, and many more. “Most American kids,” Lindsey concludes, “are now raised in an environment that is arguably less favorable for developing human capital than that in which their parents were raised.” America’s limited-government project is at risk because the nation’s foundational faith in individualism cannot survive unless upward mobility is a fact. George Will is a columnist with the Washington Post group.
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MDJ Photo Archives
Feds charge 33 in gun, drug trafficking case
Jun 19, 2013 | 0 views | 0 0 comments | 0 0 recommendations | email to a friend | print
SAVANNAH — Federal authorities in Savannah unsealed 17 indictments on Wednesday charging 33 people as part of an undercover investigation of gun and drug trafficking. The investigation, dubbed Operation Pulaski, began in late 2011. Most of those charged in the indictments live in Georgia and South Carolina. Four other people face state gun and drug charges as part of the investigation, and another eight people were indicted and prosecuted last year. “Operation Pulaski was a relentless effort to remove illegal guns from the streets of our communities and to halt the illegal sale of guns, especially where the transactions were being conducted by violent criminals,” U.S. Attorney Edward J. Tarver said in a statement. “This undercover operation serves as notice to the criminal element that if you traffic in firearms, drugs, or stolen cars in this district, you will be apprehended and you will be prosecuted.” Undercover federal agents with the Bureau of Alcohol, Tobacco, Firearms and Explosives infiltrated multiple regional and international criminal organizations. Over time, the agents bought 189 guns, including handguns, assault rifles, sawed-off shotguns and machine guns; illegal drugs, including more than 200 grams of heroin and more than 4 kilograms of cocaine; and stolen vehicles. Investigators found that the vehicles were stolen from the New York City area and were brought to the Southeast for resale or to be shipped abroad and sold. Authorities believe 26 of those arrested are convicted felons. Eleven are believed to be in the country illegally. A number of the guns the undercover agents bought had also been reported stolen. Authorities made numerous arrests in the case on Tuesday and Wednesday, and some of those arrested are set to have their initial court appearances in federal court in Statesboro today. The investigation was a collaboration between the U.S. Attorney’s Office in Savannah, the ATF and the Savannah-Chatham Metropolitan Police Department, with additional investigative support from other agencies.
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DeKalb County CEO facing corruption charges says he’s done nothing wrong
Jun 19, 2013 | 0 views | 0 0 comments | 0 0 recommendations | email to a friend | print
DECATUR — The chief executive officer of one of Georgia’s largest counties, who is facing multiple corruption charges made public Tuesday, says that he’s done nothing wrong. DeKalb County CEO Burrell Ellis made a brief statement Tuesday night, hours after a 15-count indictment alleged that he threatened to withhold county business from companies that didn’t contribute to his campaign. On Tuesday night, Ellis surrendered to authorities and was released on a $25,000 bond. “I do want to make one statement emphatically to the good people of DeKalb County that I’ve done nothing wrong as I’ve said from the very beginning,” he told reporters at his home in Stone Mountain. “I would never, ever, ever do anything to violate the public trust,” he added. The indictment accuses Ellis of trying to extort campaign contributions from companies and their employees. The indictment also alleges that Ellis instructed the county’s director of purchasing and contracting to prevent certain companies from getting business because they didn’t respond to his solicitations and didn’t contribute to his campaign. Ellis’ lawyer, J. Tom Morgan, said by email Tuesday evening that he was reviewing the indictment. The indictment is the latest in a series of challenges facing the county, which includes many of Atlanta’s eastern and northeastern suburbs. Earlier this year, Georgia Gov. Nathan Deal removed six of the nine members of the DeKalb County school board following harsh criticism by the school system’s accrediting agency. The Southern Association of Colleges and Schools had placed the school district on probation after a six-month investigation. The accreditation agency cited long-term leadership issues including nepotism, fiscal mismanagement, inappropriate micromanagement and intimidation within the district, which is Georgia’s third-largest. If Ellis is suspended, that would make him the seventh elected official in the county to be in that situation since March. According to the indictment, Ellis tried in February 2012 to get a campaign contribution from a company called Ciber Inc., and an employee there. Ellis allegedly threatened the employee, saying he would contact the company’s CEO to say the county wouldn’t be giving him their business anymore because of the employee’s poor customer service, the indictment says. A spokeswoman for Ciber said Wednesday the company is aware of the investigation and has cooperated with authorities. She declined to comment further since the case is ongoing. In another case, the indictment alleges, Ellis threatened to withhold county business from Power and Energy Services, Inc., after two company officers didn’t respond to his campaign contribution requests and a third said the company wouldn’t give money in June 2012. Then in September, the indictment says, he instructed Kelvin Walton, the county director of purchasing and contracting, not to give the company any more work and to put a note in its file saying the firm didn’t return phone calls. In October, Ellis told Walton to prevent the National Property Institute, LLC, from receiving work from the county because the company didn’t respond to his requests for campaign contributions and didn’t send money, the indictment says. Because the company didn’t respond, Ellis ordered a county employee to arrange for and attend a meeting with the company during her working hours, the indictment says. Representatives Power and Energy and NPI couldn’t immediately be reached. At some point between Nov. 1, 2011, and Nov. 30, 2012, the indictment alleges, Ellis ordered Walton to use county board of commission meeting agendas and county purchasing and contract information and data to create lists of vendors that had county contracts. Three county contract assistants helped him create those lists. Walton and the three assistants did these tasks during working hours while being paid by the company, but the lists were meant to be used by Ellis to solicit campaign contributions, the indictment says. Walton is not under indictment and he did not immediately return a call seeking comment Tuesday evening. Ellis faces a variety of charges, including criminal attempt to commit theft by extortion, conspiracy in restraint of free and open competition, and theft by taking, among others. The office of county Commissioner Elaine Boyer said the commissioners were meeting individually with the county attorney for briefings on the situation and to determine what their next steps should be. “This is a sad day for DeKalb County,” DeKalb County Commissioner Lee May said in a statement on Wednesday. “While every person is clearly innocent until proven guilty, this ongoing saga has been a distraction and continues to bring unwelcome negative publicity to our county and government,” May said. Ellis was elected to a second term as county CEO in November. If Ellis resigns or is removed from office, the county election superintendent will have to call for a special election to replace him within 15 days, according to the county organizational act. The special election would have to be held no fewer than 29 days and no more than 45 days after the call. The presiding officer of the commission would fill in until a new CEO is elected. If Ellis remains in office, state law requires the governor to form a three-person panel to consider whether he should be suspended once the district attorney’s office sends him a copy of the indictment.
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The Associated Press<br>
George Zimmer, center, talks to Andy Dolich prior to a meeting in 2009. Men's Wearhouse Inc. says it has dismissed Zimmer, its founder and executive chairman. In a press release issued Wednesday, the company didn't give a reason for the abrupt firing of Zimmer, who built Men's Wearhouse from one small Texas store using a cigar box as a cash register to one of the nation's largest specialty retailers in men's clothing, with 1,143 locations.
The Associated Press
George Zimmer, center, talks to Andy Dolich prior to a meeting in 2009. Men's Wearhouse Inc. says it has dismissed Zimmer, its founder and executive chairman. In a press release issued Wednesday, the company didn't give a reason for the abrupt firing of Zimmer, who built Men's Wearhouse from one small Texas store using a cigar box as a cash register to one of the nation's largest specialty retailers in men's clothing, with 1,143 locations.
slideshow
Parting ways — Men’s Wearhouse ousts founder, pitchman
Jun 19, 2013 | 3 views | 0 0 comments | 1 1 recommendations | email to a friend | print
The Associated Press<br>
George Zimmer, center, talks to Andy Dolich prior to a meeting in 2009. Men's Wearhouse Inc. says it has dismissed Zimmer, its founder and executive chairman. In a press release issued Wednesday, the company didn't give a reason for the abrupt firing of Zimmer, who built Men's Wearhouse from one small Texas store using a cigar box as a cash register to one of the nation's largest specialty retailers in men's clothing, with 1,143 locations.
The Associated Press
George Zimmer, center, talks to Andy Dolich prior to a meeting in 2009. Men's Wearhouse Inc. says it has dismissed Zimmer, its founder and executive chairman. In a press release issued Wednesday, the company didn't give a reason for the abrupt firing of Zimmer, who built Men's Wearhouse from one small Texas store using a cigar box as a cash register to one of the nation's largest specialty retailers in men's clothing, with 1,143 locations.
slideshow
The Associated Press NEW YORK — Men’s Wearhouse doesn’t like the way its founder looks anymore. The men’s clothier said Wednesday that it has fired the face of the company and its executive chairman, George Zimmer, 64, who appeared in many of its TV commercials with the slogan “You’re going to like the way you look. I guarantee it.” The company announced the move in a terse statement that gave no reason for the abrupt firing of Zimmer, who built Men’s Wearhouse Inc. from one small Texas store using a cigar box as a cash register to one of the North America’s largest men’s clothing sellers with 1,143 locations. The firing appears to end the career of one of TV’s most recognizable pitchmen. Zimmer’s slogan became almost a cultural touchstone, and his natty but down-to-earth charm made dressing sharply feel more accessible to men. Zimmer said in a written statement that over the past several months he and the company’s board disagreed about the company’s direction. “Over the last 40 years, I have built The Men’s Wearhouse into a multi-billion dollar company with amazing employees and loyal customers who value the products and service they receive at The Men’s Wearhouse,” he said in a statement. But he noted that “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 by terminating me as an executive officer.” The bad blood spooked investors, who drove Men’s Wearhouse’s stock down 53 cents to $36.94. The stock is still near its 52-week high of $38.59 and ended Tuesday up about 20 percent since the start of the year. Beyond creating a successful company, Zimmer is known as something of a cowboy in the business world. He brought in spiritual leader Deepak Chopra as a member of the company’s board in 2004. He put his fortune to work behind California’s failed Proposition 19 in 2010, which would have legalized marijuana in California, where he lived. And Men’s Wearhouse didn’t conduct background checks on new hires because Zimmer believed that everyone deserves a second chance. “He’s one of a kind,” said Richard Jaffe, a Stifel Nicolaus analyst. “He’s an entrepreneurial visionary. ... He made looking terrific available for every man in America.” Zimmer declined to comment for the article through his personal publicist beyond the statement. Calls to company executives and board members were immediately referred to a company spokesperson, who declined to comment beyond the release. Jaffe speculated that Zimmer, who handed over his title as CEO to Douglas Ewert in 2011, may have had difficulty in letting go of the company’s reins. “Clearly, something happened abruptly and fairly dramatically,” he said. Jaffe also speculated that perhaps the company was looking for a new spokesman so it could target younger shoppers. Like many clothing retailers, Men’s Wearhouse saw its sales and profits battered during the Great Recession, but over the last two years the company’s business has been recovering. For the latest year ending Feb. 2, the company’s revenue rose 4.4 percent to $2.48 billion. Net income rose 5.3 percent to $131.7 million. The firing comes a week after Men’s Wearhouse reported that its fiscal first-quarter profit increased 23 percent. Three months ago, the company said it was conducting a strategic review of its K&G store division, which it acquired in 1999. The division, which accounts for about 15 percent of the company’s total revenue, is very promotional and has seen its business decline. Jaffe speculated that deciding what to do with that division could have been a point of contention. Still, a few other analysts and experts in executive recruiting said privately that the ousting could be something more than just wrangling over the direction of the company and pointed out that the timing of the announcement was odd. It happened the morning the company’s annual shareholder meeting had been set to take place. The company delayed the meeting but didn’t give a new date. The company said the purpose of postponing the annual meeting is to re-nominate the existing board of directors without Zimmer. It said the board expects to discuss with Zimmer the extent, if any, and terms of “his ongoing relationship” with the company, language that seemed to leave a small window open for him to remain an advertising spokesman. Also highlighting the suddenness of the firing: The company’s website still prominently spotlighted Zimmer for much of Wednesday, calling him “The Man Behind The Brand” and linking to YouTube videos of “the man in action.” The pages were still available by midafternoon, though a prominent link from the site’s front page had been removed. “This is very rare to fire a founder. Founders are generally entrenched in the company,” said Eleanor Bloxham, CEO of The Value Alliance, a board advisory firm. In 1971, fresh out of college, Zimmer made his first foray into the clothing industry, working in Hong Kong for six months as a salesman for his father’s coat manufacturing business, according to the company website. In 1973, he and his college roommate opened the first Men’s Wearhouse store, which sold $10 slacks and $25 polyester sport coats, in Houston. His personal car was a van with the company logo on the side and clothing racks in the back. The company aired its first TV commercial in the 1970s when commercials for clothing were rare. Zimmer starred in his first commercial in 1986, with the line “I guarantee it.” Men’s Wearhouse kept expanding, focusing on large markets where business was sluggish to take advantage of lower real estate costs. It also expanded beyond sports coats and trousers to casual sportswear in the 1980s and then went into the tuxedo rental business in 2000. The company went public in 1992, and the company has been cited by Fortune magazine as one of the top 100 best companies to work for. Zimmer owned 1.8 million shares of Men’s Wearhouse as of the company’s May 9 proxy filing, a 3.5 percent stake. The company, based in Fremont, Calif., also runs the Moores retail chains. It also sells uniform and work wear in the U.S. and U.K.
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Upward mobility, it’s not getting any easier ...
by George Will
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Jun 19, 2013 | 28 views | 0 0 comments | 1 1 recommendations | email to a friend | print
All men are by nature equal, But differ greatly in the sequel. A quarter of a millennium later, that couplet from a colonial American almanac defines an urgent challenge. Modern society increases how, and the predictability of how much, people differ in the sequel. If America is to be equitable, with careers open to all talents and competent citizens capable of making their way in an increasingly demanding world, Americans must heed the warnings implicit in observations from two heroes of modern conservatism. In “The Constitution of Liberty” (1960), Friedrich Hayek noted that families are the primary transmitters of human capital — habits, mores, education. Hence families, much more than other social institutions or programs, are determinative of academic and vocational success. In “The Unheavenly City” (1970), Edward C. Banfield wrote: “All education favors the middle- and upper-class child, because to be middle or upper class is to have qualities that make one particularly educable.” Elaborating on this theme, Jerry Z. Muller, a Catholic University historian, argues in the March/April 2013 issue of Foreign Affairs that expanding equality of opportunity increases inequality because some people are simply better able than others to exploit opportunities. And “assortative mating” — likes marrying likes — concentrates class advantages, further expanding inequality. As Muller says, “formal schooling itself plays a relatively minor role in creating or perpetuating achievement gaps” that originate “in the different levels of human capital children possess when they enter school.” The Cato Institute’s Brink Lindsey argues in “Human Capitalism: How Economic Growth Has Made Us Smarter — and More Unequal” that economic growth intensifies society’s complexity, which “has opened a great divide between those who have mastered its requirements and those who haven’t.” Modernity — education-based complexity — intensifies the demands on mental abilities. People invest increasingly in human capital — especially education — because status and achievement increasingly depend on possession of the right knowledge. Lindsey cites research showing that “by the time they reach age 3, children of professional parents have heard some 45 million words addressed to them — as opposed to only 26 million words for working-class kids, and a mere 13 million words in the case of kids on welfare.” So, class distinctions in vocabularies are already large among toddlers. Parental choices of neighborhoods and schools mean that children of college-educated parents hang out together. Such peer associations may have as much effect on a child’s development as do parents. These factors, Lindsey says, explain why “people raised in the upper middle class are far more likely to stay there than move down, while people raised in the working class are far more likely to stay there than move up.” In a historical blink, Lindsey says, humanity has moved from lives rooted in a remembered past to lives focused on an imagined future. This future orientation favors the intellectually nimble. “Who gets ahead, who struggles to keep up, and who gets left behind are now determined primarily by how people cope with the mental challenges of complexity.” And coping skills are incubated in families. Today, the dominant distinction defining socioeconomic class is between those with and without college degrees. Graduates earn 70 percent more than those with only high school diplomas. In 1980, the difference was just 30 percent. Soon the crucial distinction will be between those with meaningful and those with worthless college degrees. Many colleges are becoming less demanding as they become more expensive: They rake in money — much of it from government-subsidized tuition grants — by taking in many marginally qualified students who are motivated only to acquire a credential, and who learn little. Lindsey reports that in 1961, full-time college students reported studying 25 hours a week on average; by 2003, average studying time had fallen to 13 hours. Half of today’s students take no courses requiring more than 20 pages of writing in a semester. Given the role of practice in developing expertise, “the conclusion that college students are learning less than they used to seems unavoidable.” Small wonder those with college degrees occupying jobs that do not require a high school diploma include 1.4 million retail salespeople and cashiers, half a million waiters, bartenders and janitors, and many more. “Most American kids,” Lindsey concludes, “are now raised in an environment that is arguably less favorable for developing human capital than that in which their parents were raised.” America’s limited-government project is at risk because the nation’s foundational faith in individualism cannot survive unless upward mobility is a fact. George Will is a columnist with the Washington Post group.
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