Abercrombie & Fitch said on Tuesday that it has spit the roles of chairman and chief executive, a significant move by the embattled teen retailer as it faces pressure from investors.
The appointment of Arthur C. Martinez, the chairman of HSN Inc., as nonexecutive chairman strips Michael S. Jeffries of a role that he has held since 1996. Mr. Jeffries will remain chief executive, however.
Beyond adding Mr. Martinez, Abercrombie added two other new directors: Terry Burman, the chairman of the Zale Corporation, and Charles R. Perrin, a former chief executive of Duracell. The retailer’s board now numbers 12 members, all up for re-election ever year.
And the company also eliminated its shareholder rights plan, designed to prevent investors or potential buyers from buying too much control over the retailer’s shares.
Tuesday’s news seemed heralded by shareholders, with Abercrombie’s stock up 6 percent in early morning trading at $36.74.
The move by Abercrombie is the biggest change yet since the emergence of dissatisfaction among its investors. Once heralded as a champion of teen clothing â€" a feat built largely on a provocative advertising campaign and no small end of controversy â€" the company has since fallen behind rivals.
Among the biggest targets for criticism has been Mr. Jeffries, who has been credited for masterminding the retailer’s rise and then overseeing its descent. The 69-year-old executive has had his share of clumsy comments, including publicly saying he wanted to chase only “the cool kids†and admitting his company was exclusionary.
Investors have certainly lost confidence in the retailer: Its shares have fallen 30 percent in the 12 months ended on Monday, before news of the governance shakeup.
One of the more vocal critics has been Engaged Capital, an activist hedge fund that holds a stake of about 0.5 percent. The investment firm had publicly urged Abercrombie to replace Mr. Jeffries, or, failing that, to explore selling itself.
Abercrombie didn’t quite go that far. Days after Engaged made its demand, the board renewed Mr. Jeffries’ employment contract, but tied his compensation more closely to the company’s performance.
