Teen retailer Abercrombie & Fitch (NYSE: ANF) stripped chairman and CEO Mike Jeffries of his chairman title as it announced on Tuesday "significant changes" to its board of directors in response to shareholder concerns. Arthur Martinez, previously CEO of Sears, Roebuck & Co. will replace him as non-executive chairman.
In addition to Martinez, Abercrombie announced the two independent directors to its board. Terry Burman, former CEO of Signet Jewelers (NYSE:SIG) and Barry's Jewelers, and Charles Perrin, former CEO of Avon Products (NYSE:AVP) and Duracell International, will also be joining the board.
Jeffries, 69, became Abercrombie's CEO in February 1992, and chairman in May 1998. Abercrombie renewed an employment contract with Jeffries in December, despite the objections of shareholders who publicly urged the teen retailer to replace him. Investment firm Engaged Capital made the recommendation as Abercrombie posted losses of $11.5 million in the most recent quarter, with sales down more than 7 percent. In recent years, Jeffries' controversial comments have been a pain point for the company and hurt the brand's reputation among consumers.
Martinez, 73, retired from Sears in 2000, after overseeing the company's "Softer Side of Sears" campaign to grow sales of that retailer's soft lines businesses. He has served as a director of IAC, an internet services company, since 2005, but has not been directly involved in retail for nearly 14 years.
Abercrombie also announced it was eliminating its shareholder rights plan, often called a poison pill. The plan had been devised to fend off unwanted takeover bids from potential buyers. The move could be a sign that the retailer is now more open to activist investors who may push for a breakup of the company.
-See this Abercrombie & Fitch press release
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