A man holds shopping bags from retailer Abercrombie & Fitch while waiting to cross a street in New York in 2009.Mike Segar/Reuters
Abercrombie & Fitch Co. chief executive officer Mike Jeffries, who turned the retail chain into a hot teen-apparel company in the 1990s before it lost its cachet in recent years, is stepping down.
Jeffries will retire immediately as CEO and a member of the board, the New Albany, Ohio-based company said Tuesday in a statement. The board is now seeking a replacement for Jeffries and has enlisted an executive search firm to identify both internal and external candidates.
Jeffries, 70, has come under fire as the Abercrombie and Hollister clothing lines lost their relevance with teenage shoppers, leading to declining same-store sales and tumbling profit. Abercrombie had already stripped Jeffries of his chairman role earlier this year. It created a new chief operating officer job and named four new independent directors to its board as part of a deal with Engaged Capital LLC, an activist investor that sought changes at the company. The retailer has also named two new executives to head up the Abercrombie and Hollister brands.
Investors applauded Jeffries's departure, sending the stock up as much as 9.8 per cent to $28.94 in early trading. Through yesterday's close, the retailer's shares had fallen almost 20 per cent this year so far.
As part of today's changes, Abercrombie & Fitch's nonexecutive chairman, Arthur Martinez, will become executive chairman.