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Abercrombie Bows to Activist Investor Engaged With New Directors

Abercrombie & Fitch Spring/Summer 2014 | Source: Abercrombie & Fitch
By
  • Bloomberg

NEW YORK, United States — Abercrombie & Fitch Co. named four new independent directors to its board after forging a truce with activist investor Engaged Capital LLC, which had sought a management shakeup at the teen retail chain.

Hudson's Bay Co. Vice Chair Bonnie Brooks, ex-Ralph Lauren executive Sarah Gallagher, Fossil Group Inc. director Diane Neal and Ernst & Young LLP veteran Stephanie Shern will be nominated for election to the board, according to a statement today. Four current members won't stand for re-election, leaving the 12- person board with 11 independent directors.

“Our new director nominees each bring strong and relevant backgrounds,” Arthur Martinez, nonexecutive chairman of the New Albany, Ohio-based company, said in the statement. “These actions will further enhance the board and management team’s focus, including strengthening the business, executing on the company’s strategic plans and succession planning.”

Mike Jeffries, Abercrombie’s chief executive officer, has been revamping his management team after four straight quarters of declining sales. In January, the company promoted Jonathan Ramsden to the newly created chief operating officer position, and hired Joanne C. Crevoiserat in April to replace him as chief financial officer. The retailer also has announced plans to hire two presidents to run the Hollister and Abercrombie brands.

Engaged had nominated five directors to the board in February, saying the retailer needed a new strategy. It has also called for a new top executive and pushed the clothing maker to consider putting itself up for sale.

As part of its board changes, Abercrombie also split up the chairman and CEO roles in January.

By Lindsey Rupp; Editors: Nick Turner, Cecile Daurat

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