After almost 22 years as CEO of the company, Michael Jeffries is retiring, effective immediately.
The decision was apparently made by Jeffries, 70, himself. However it has emerged that investors in the company have been trying to get him to step down due to ‘the controversies he’s brought to the brand’ and falling profits.
Last month, the company was “clearly disappointed” with its financial results, with sales falling to £911.4m from £1.03bn, over £60m less than analysts expected, according to Thomson Reuters
On top of failing profits, Jeffries managed to provoke outrage with his statements as a CEO. In an interview in 2006, he defined the company’s approach in a way that would come to haunt him.
“In every school there are the cool and popular kids, and then there are the not-so-cool kids. Candidly, we go after the cool kids. We go after the attractive all-American kid with a great attitude and a lot of friends. A lot of people don’t belong [in our clothes], and they can’t belong. Are we exclusionary? Absolutely. Those companies that are in trouble are trying to target everybody: young, old, fat, skinny. But then you become totally vanilla. You don’t alienate anybody, but you don’t excite anybody, either.”
Abercrombie & Fitch recently reported a 25% fall in the third quarter adjusted net income and slashed yearly profit forecasts. It cited disruption and turmoil in the teen clothing sector alongside heavy discounting.
“The next chief executive for this company is going to be navigating some very complex waters,” Mr. Martinez said in an interview, who was the non-chairman since January, now the executive chairman.
The company’s share price is up more than 6% on this morning’s news, despite there being no clear succession plan.
“It has been an honour to lead this extraordinarily talented group of people,” Mr. Jeffries said in a statement. “I am extremely proud of your accomplishments. I believe now is the right time for new leadership to take the company forward in the next phase of its development.”
Arthur Martinez went on further to say, “Going forward we are confident in our talented senior leadership team and the steps we are taking to revitalise our brands and business.”
“We are also confident that our search will identify a new leader with the skills and expertise to enable Abercrombie & Fitch to capitalise fully on its growth opportunities and build shareholder value.”