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[January 28, 2014]
Abercrombie & Fitch separates CEO, chairman roles
(Associated Press Via Acquire Media NewsEdge) NEW ALBANY, Ohio (AP) — Abercrombie & Fitch is separating its chairman and CEO roles and expanding its board's size. The teen retailer is also terminating its shareholder rights plan.
Such a plan, also known as a "poison pill," is typically used by a company when it is trying to ward off a hostile takeover attempt.
Arthur Martinez, the former head of Sears, was named non-executive chairman. Michael Jefferies, who'd served as chairman since 1996, will remain a director and the CEO.
Abercrombie & Fitch Co. named Martinez plus Terry Burman and Charles Perrin as directors, expanding its board to 12 members. The appointments are effective immediately.
Burman is the former CEO of Signet Jewelers Ltd. and before that was president and CEO of Barry's Jewelers Inc. Perrin is the former chairman and CEO of Avon Products Inc. and previously held the same posts at Duracell International Inc.
Abercrombie shares added 6 percent, or $2.09, to $36.70 in morning trading. The stock is down 26 percent in the past year.
Last month Abercrombie & Fitch announced that it was reworking Jefferies' contract, tying his compensation more closely with company performance.
Jeffries helped establish the company's reputation after arriving in the 1980s, but Abercrombie has struggled recently and Jeffries came under withering fire for comments relating to the type of customer he wants in his store and the fact that the store does not offer plus sizes.
In the nine weeks through Jan. 4, a period that includes the crucial holiday shopping season, sales at stores open at least a year fell 6 percent. This metric is a considered a key indicator of a retailer's health.
Prior to Abercrombie's announcement that it was retooling Jefferies' contract, Engaged Capital — which owns 400,000 shares of the retailer — sent a letter to the company demanding that Jeffries be replaced. Engaged said at the time that 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.
Abercrombie & Fitch also announced Tuesday that Craig Stapleton will no longer serve as lead independent director, a post he'd held since 2010. Stapleton will continue to serve as a board member and as chair of the nominating and board governance committee.
Stapleton said in a statement that the changes the company was making was partly in response to shareholder concerns and said the chain would continue to review other potential "corporate governance enhancements." Abercrombie & Fitch, whose brands include Hollister, Gilly Hicks and its namesake, is based in New Albany, Ohio. It currently runs 890 stores in the U.S. and 166 stores in Canada, Europe, Asia and Australia.
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