Once upon a time, when Abercrombie & Fitch was a tweedy place for fly fishermen and wannabe bighorn sheep slayers, it fell upon hard times. Then Mike Jeffries came along and made it feel — and act — young. It thrived. But, as inevitably as the AARP cards arriving in the mailboxes of Gen Xers, things got old again. Jeffries, 70, is retiring.
The trip to the pasture is “effective immediately,” according to a news release, out of New Albany, Ohio, yesterday, with A&F's current non-executive chairman Arthur Martinez becoming executive chairman. Jeffries was stripped of the chairman’s title in January.
“In an unusual arrangement, Abercrombie will operate without a CEO until a replacement can be found, highlighting the suddenness of what the company said was his decision to retire,” Suzanne Kapner and Joann S. Lublin report in the Wall Street Journal.
Company COO Jonathan Ramsden, A&F brand president Christos Angelides and recently appointed Hollister brand president Fran Horowitz will join Martinez in a new office of the chairman that will oversee strategic direction and manage day-to-day operations as it searches for a new CEO — from within and without — with the help of an unnamed executive search firm.
“Whether or not [Jeffries] was asked to leave or simply chose to do so doesn’t really matter,” saysForbes contributor Robin Lewis. “The bottom line is that it is a net positive for the brand, because he has not been able to re-position it.”
“This move surprised some investors and analysts since Abercrombie extended Mr. Jeffries’ contract last year through February 2015, calling him a visionary. But this year has been a rough one for Abercrombie,” writes Maureen Farrell for the WSJ’s “Moneybeat.” “The company recently lowered its outlook for 2015, and has seen its shares drop 20% year-to-date through Monday’s close.”
Yesterday was a different story, with investors boosting the stock 6.5% on the news.
“This is what people have been waiting for,” Nomura Holdings analyst Simeon Siegel tells Bloomberg’s Lindsey Rupp. “They’ve not been happy with the results. So in theory, change is good.”
Still, warnsBarron’s Johanna Bennett, “don’t be fooled into thinking that today’s rally marks the start of a sustained turnaround.” Besides some short selling and glum predictions for the holidays overall, “the world of teen apparel is fiercely competitive, not just on price tags but also efforts to capture the affections of fickle teenagers.”
And therein lie the bighorns of A&F’s dilemma.
Fortune’s John Kell points out that “the teen retailer has faced pressure from fast-fashion chains such as Forever 21 and H&M. Abercrombie, as well as its peers American Eagle and Aeropostale, have found themselves out of favor and out of style with the sale of logo-adorned shirts and other apparel.”
The logo, for all of its transmutations since David T. Abercrombie and Ezra H. Fitch first opened the doors to the New York City retail shop in 1892, has long been its crown jewel. But with sentiments shifting, “Abercrombie has pivoted to retain its footing by going after more grown-up, affluent shoppers, partly by moving to lessen the use of its logos in the U.S. and expand the variety of styles in stock,” Kell writes.
“While Mr. Jeffries won praise for turning a struggling sporting goods brand into a profitable emblem of high school popularity, he has more recently attracted attention for a series of public stumbles, including a statement that Abercrombie was exclusionary and wanted to attract only ‘the cool kids,’” Rachel Abrams reminds us in the New York Times.
Jeffries’ recent stumbles and bumbles will be his legacy in some quarters.
“Abercrombie Stocks Surge After Creepy Old CEO Announces His Retirement,” reads the hed over Julianne Escobedo Shepherd’s piece for Jezebel, which references Davia Temin’s “How A CEO Can Wreck A Brand In One Interview: Lessons From Abercrombie & Fitch Vs. Dove” piece for Forbes last year.
Jeffries “did not announce his intent for the future, but here's to hoping it holds a totally bananas memoir that we can deliciously hate-read at the beach while sunning our perfect hot bods,” Escobedo Shepherd concludes with a sardonic twist in Jeffries’ gut.
But his acumen in turning around the sinking brand over the past 20 years was hailed by others, including Martinez.
“It is impossible to overstate Mike Jeffries' extraordinary accomplishments in building Abercrombie & Fitch to the iconic status the brand now enjoys,” Martinez said in the company’s statement. “From a standing start two decades ago, his creativity and imagination were the driving forces behind the company's growth and success.”