The Business of Fashion
Agenda-setting intelligence, analysis and advice for the global fashion community.
Agenda-setting intelligence, analysis and advice for the global fashion community.
NEW YORK, United States — Abercrombie & Fitch Co. gained after investor Engaged Capital LLC urged the teen-clothing retailer to start a search for a new chief executive officer and consider selling the company.
The shares advanced as much as 7.3 percent after Engaged Capital said in a letter to Abercrombie’s board that there’s “no qualified successor” to Chief Executive Officer Michael Jeffries, whose contract expires Feb. 1. Jeffries is a “major stumbling block” to a potential sale of the company to private equity, Engaged Capital said.
“The board needs to come to the same conclusion that everyone else already has –- it is time for new leadership at Abercrombie & Fitch,” Glenn Welling, chief investment officer at Engaged Capital, wrote in the letter.
Engaged Capital, a Newport Beach, California-based activist investor, owns about 400,000 shares, or less than 1 percent of shares outstanding.
ADVERTISEMENT
Jeffries has been struggling to reconnect with the chain’s teenage customers who have become less enamored of its fashions, half-naked models and noisy stores. Full-year earnings will be as much as $1.50 a share on an adjusted basis, excluding charges, Abercrombie said in a Nov. 5 statement, below the $1.97 estimate of analysts.
The retailer has “had extensive discussions with many of its shareholders, including Engaged Capital, over the past several months,” Abercrombie said in an e-mail. “We look forward to continuing our dialogue with shareholders as we execute on our long-term plan.”
Abercrombie, based in New Albany, Ohio, rose 6.5 percent to $36.22 at 12:10 p.m. in New York, after reaching $36.50 for the biggest intraday gain since May.
By Lindsey Rupp; Editors: James Callan, John Lear, Robin Ajello
From analysis of the global fashion and beauty industries to career and personal advice, BoF’s founder and CEO, Imran Amed, will be answering your questions on Sunday, February 18, 2024 during London Fashion Week.
The State of Fashion 2024 breaks down the 10 themes that will define the industry in the year ahead.
Imran Amed reviews the most important fashion stories of the year and shares his predictions on what this means for the industry in 2024.
After three days of inspiring talks, guests closed out BoF’s gathering for big thinkers with a black tie gala followed by an intimate performance from Rita Ora — guest starring Billy Porter.