The activist hedge fund that has been pushing for change at Abercrombie & Fitch stepped up its fight on Thursday by nominating five director candidates despite changes that the retailer has announced in recent weeks.
The investor, Engaged Capital, said that its nominees â€" including a former chief operating officer of J.C. Penney and a former chief executive of Bath & Body Works â€" would introduce much-needed independence to the company’s board.
The proxy fight comes only a few weeks after Abercrombie sought to appease shareholders by splitting the roles of chairman and chief executive, which reduced the power of its longtime chief, Michael S. Jeffries, and adding three new directors to its existing nine-member board.
But Engaged said on Thursday that the changes weren’t enough. Abercrombie is still dominated by the same nine-person board that the hedge fund contends oversaw the company’s fall from onetime teen Mecca to an also-ran.
“We need a board of independent leaders who can set a new direction for Abercrombie,†said Glenn W. Welling, the head of Engaged Capital, said in a statement. “For far too long, stockholders have suffered under the failed leadership of a board that has lacked the independence necessary to properly act as our fiduciaries.â€
The full list of Engaged’s slate is:
- Alexander P. Brick, 55, the former chief executive of the Specialty Retail Group, which runs a number of British menswear retailers
- Robert D. Huth, 68, the former chief executive of David’s Bridal
- Michael W. Kramer, 49, a former chief operating officer of J.C. Penney
- Diane L. Neal, 57, the former chief executive of Bath & Body Works
- Glenn W. Welling, 43, the head of Engaged
The activist investor said that it had attempted to negotiate a settlement with the board in recent weeks, but nothing came of the talks. A person close to Engaged added that it has also held discussions with the three new directors, but concluded that their voices would be outweighed by the incumbent board.
This person added that the hedge fund has been in talks with several big investors over recent weeks, and that the firm believes it has support for a boardroom shakeup.
But it’s unclear how broad that support is. Shares in Abercrombie were little changed in early morning trading on Thursday, at $34.74.
