Engaged Capital Issues Letter to A&F Board, Urges Board to Initiate CEO Search or Consider Sale
Engaged Capital, an investment firm specializing in small and mid-cap North American equities and beneficial owner of approximately 400,000 shares of the common stock of Abercrombie & Fitch Co. (NYSE: ANF), today sent a letter to the Company's Board of Directors (the “Board”).
In its letter, Engaged Capital highlighted the upcoming expiration of Abercrombie Chairman and CEO, Michael Jeffries' employment contract on February 1, 2014 as an opportunity for the Board to set a new direction for the Company. Engaged Capital also expressed its concern that no qualified successor appeared to exist at Abercrombie, and noted that continuing on the present course under the leadership of Mr. Jeffries' would further cement the loss of shareholder confidence in the Board.
“Investors in Abercrombie have endured poor performance due to poor leadership for far too long. The Board needs to come to the same conclusion that everyone else already has – it is time for new leadership at ANF. The renewal of Mr. Jeffries' employment contract would be a direct contradiction to what shareholders want and the Company needs. ANF's future success will be dependent on the Company's ability to adapt to a fast changing retail environment, carefully manage expenses, and efficiently allocate capital. We urge the Board to immediately commence a CEO search for candidates with relevant retail apparel and turnaround experience or consider a sale of the Company,” said Glenn W. Welling, Principal and Chief Investment Officer of Engaged Capital.
The full letter to the Board may be accessed here http://engagedcapital.com/images/Engaged letter to ANF.pdf
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