Abercrombie CEO Abruptly Retires As Sales Fall
NEW YORK (AP) — Abercrombie & Fitch's longtime and controversial CEO Michael Jeffries has abruptly retired, as the once-hip teen clothing chain's sales decline.
Investors pushed Abercrombie's shares up more than 6 percent on the news.
Jeffries is also retiring from the retailer's board of directors. He has served as CEO since February 1992, according to CapitalIQ.
"I believe now is the right time for new leadership to take the company forward in the next phase of its development," Jeffries said in a statement.
The company, whose other brands includes Abercrombie, Hollister Co. and Gilly Hicks, said it has begun a search for Jeffries's successor and has hired an executive search firm to evaluate both internal and external candidates.
Jeffries leaves under a cloud of controversy. Last year, activist hedge fund Engaged Capital sent a letter to the company's board pushing for Jeffries to be replaced. Engaged at the time said it believed the retailer's "perennial" underperformance is a result of a failure of leadership and urged the board to put new leadership in place.
Jeffries, known for being outspoken, also has stirred up controversy for statements about how the chain goes after attractive kids who can fit into the clothes, alienating customers who don't fit into the image of the brand.
Jeffries' departure comes a week after the teen retailer cut its annual profit outlook and reported an 11.5 percent drop in sales in its third quarter.
Like its competitors American Eagle Outfitters and Aeropostale, Abercrombie & Fitch has been looking to stock trendier clothing as its sales have weakened and teens have chosen to shop at lower-priced rivals like H&M and Forever 21.
Abercrombie has even stripped its once-prized Abercrombie logo off more products as teens are now seeking more individuality in their clothing. But the efforts haven't born fruit.
For the fall season, Abercrombie reduced its logoed merchandise by half and previously announced plans to try and have a minimal North American logo business in the spring.
Abercrombie & Fitch has also increased its emphasis on online shopping as it looks to reshape itself.
As part of the management changes announced Tuesday, the chain said that current Nonexecutive Chairman Arthur Martinez will become executive chairman. He has served as nonexecutive chairman since January, when Abercrombie separated its chairman and CEO roles and stripped Jeffries of the chairman title.
Abercrombie & Fitch Co. also said its board has created an Office of the Chairman that will include Martinez; Chief Operating Officer Jonathan Ramsden; Christos Angelides, brand president of Abercrombie & Fitch; and Fran Horowitz, brand president of Hollister.
The Office of the Chairman will be led by Martinez and will oversee Abercrombie & Fitch's strategic direction. It will also be responsible for managing the company's day-to-day operations until a new CEO is appointed.
Abercrombie & Fitch had 834 stores in the U.S. and 166 stores across Canada, Europe, Asia, Australia and the Middle East at the third quarter's end.
Shares of the New Albany, Ohio-based company rose $1.59 to $27.94 in morning trading.
– by AP Reporters Anne D’Innocenzio and Michelle Chapman