New York—Abercrombie & Fifth, once the shinning star of teen retailing that has now fallen on tough times, reported a shake-up today in wake of complaints by major shareholders about the company’s executives.
According to today’s announcement, Michael Jeffries, the longtime chairman/ceo, had his chairman’s position removed and Arthur Martinez, former chairman/ceo at Sears, was names as non-executive chairman. Jeffries will continue as director and chief executive.
The retailer also ended its shareholder right plan (or poison pill) that is used by a company to stave off a possible hostile takeover.
In addition, Abercrombie named two more directors to its board, expanding the total to 12 members.
One is Terry Burman, chairman of Zale Corp. and former chief executive at Signet Jewelers Let. to the board, effective immediately. Also named was Charles Perrin, former chairman/ceo at Avon Products.
Craig Stapleton will no longer serve as lead independent director but he 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 were partly in response to shareholder concerns and said the chain would continue to review other potential “corporate governance enhancements.”
Recently, Engaged Capital, which owns about 400,000 shares in the company, fired off a letter to the board demanding that Jeffries be replaced. Engaged maintained that the company’s “perennial underperformance is a result of a failure of leadership” and urged the board to put new leadership in place.
Last month Abercrombie announced that it was reworking Jefferies’ contract, tying his compensation more closely with the company’s performance.
Jeffries, who helped turnaround Abercrombie in the 1980s, came under fire in recent months after making several gaffes that upset shareholders and consumers.
Abercrombie, which swung into a third quarter loss, reported in November a nearly 12% drop in sales. For the nine weeks ended Jan. 4, comparable store sales fell 6%.
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