Abercrombie Investor Nominates Directors in Board FightLindsey Rupp
Abercrombie & Fitch Co. investor Engaged Capital LLC, which has pushed for the clothing maker to consider putting itself up for sale, nominated five directors to the board, saying the company needs a new strategy.
The proposed board members include the former chief executive officers of Specialty Retail Group, David’s Bridal and Bath & Body Works, as well as former J.C. Penney Co. executive Michael Kramer and Engaged Chief Investment Officer Glenn Welling, according to a statement today.
Engaged, an investment company that specializes in small-and mid-cap stocks, prodded Abercrombie to consider selling itself to a private-equity firm last year. It also urged the company to search for a new CEO to replace Michael Jeffries. The clothing chain has fallen out of favor with teen shoppers, leading to three straight quarters of declining sales.
“It’s just them trying to get the company to take very seriously a further shake-up of the board,” Pamela Quintiliano, a New York-based analyst at SunTrust Banks Inc., said in a phone interview today. She recommends buying the shares. “It’s before earnings, so it’s not like it’s based on any new data points. It’s just ongoing disgruntledness.”
Abercrombie said it received the nominations and will review the candidates as part of its normal process.
“Abercrombie & Fitch is committed to continued engagement with its shareholders, including regarding corporate governance matters,” Arthur Martinez, Abercrombie’s non-executive chairman, said in a statement.
Engaged scored a partial victory in January when New Albany, Ohio-based Abercrombie agreed to separate the CEO and chairman roles and increase the board to 12 members from nine. The retailer named Martinez, a former executive at Sears, Roebuck & Co., non-executive chairman. The retailer also named Chief Financial Officer Jonathan Ramsden to the newly created role of chief operating officer. Jeffries, who had been chairman since 1996, continues to serve on the board.
“We need a board of independent leaders who can set a new direction for Abercrombie,” Welling said in today’s statement. “For far too long, stockholders have suffered under the failed leadership of a board that has lacked the independence
Abercrombie fell 0.1 percent to $34.59 at the close in New York. The shares have gained 5.1 percent this year, compared with a 0.5 percent decline for the Standard & Poor’s 500 Index.