Abercrombie & Fitch said Tuesday that it has split the roles of chairman and chief executive, a major step seen as an effort to calm investors’ nerves. CEO Michael S. Jeffries will no longer be chairman, a post he’s held since 1996. HSN Inc. chairman Arthur C. Martinez was named non-executive chairman.
The New Albany, Ohio-based teen clothing retailer also named two new directors — Zale Corporation chairman Terry L. Burman and former Duracell CEO Charles R. Perrin — and axed its shareholder rights plan.
Abercrombie and Fitch stock has suffered all year, but rose 6% after this shakeup was announced.
Who's eating with the cool kids now? While Abercrombie and Fitch has suffered under the same retail environment as many retailers in the teen clothing arena, with teens and their parents reluctant in recent months to shell out too much on clothes, it's also been feeling the pain of self-inflicted wounds. CEO and now former-chairman Michael S. Jeffries last year made some ugly comments including that the retailer's idea of catering to its customers was to be exclusive to only “cool kids.” Jeffries has been credited with Abercrombie and Fitch’s rise and, not surprisingly, is now blamed for its fall. Abercrombie and Fitch is clearly desperate to regain its footing with teens, and removing Jeffries from his chairman role may not go far enough for his detractors. Unless he can turn the company around, he may find out he’s not in charge of deciding who the cool kids are anymore.