Abercrombie & Fitch faces board fight
NEW ALBANY, Ohio (AP) — Abercrombie & Fitch said it is reviewing a proposal to add five members to its board.
Engaged Capital, which holds a less than 1 percent stake in the New Albany, Ohio-based teen retailer, said Thursday that Abercrombie's board "lacks a majority of qualified, independent and accountable voices," and offered a slate of five prospective board members.
Previously, Engaged called for the resignation of longtime company CEO Mike Jefferies.
Abercrombie, known for its preppy clothing and logo-emblazoned t-shirts, has faced falling sales as finicky teens shop elsewhere. In its most recent quarter revenue fell 12 percent. And during the key holiday sales season of November and December, revenue in stores open at least one year, a key retail metric, fell 6 percent as the company discounted heavily to spur sales.
Under pressure from Engaged and other shareholders, Abercrombie has been making changes. It separated the CEO and chairman positions, formerly both held by Jefferies. And it promoted Chief Financial Officer Jonathan Ramsden to chief operating officer. It has also named three new board members and terminated a shareholder rights plan, also known as a "poison pill," which Is typically used by a company to ward off a hostile takeover attempt.
In a statement, Chairman Arthur Martinez said Abercrombie has told Engaged "numerous times" that the company is committed to making changes to its turnaround plan. It said it will review the nominees and make a recommendation to shareholders at a later date.
Shares rose 70 cents, or 2 percent, to $35.29 in midday trading. The stock is up 5 percent since the beginning of the year.