Abercrombie: CEO of struggling fashion chain departs

NEW YORK, USA - Struggling hip youth fashion chain Abercrombie & Fitch said Tuesday that Chief Executive Michael Jeffries is retiring immediately and that it was searching for a new CEO to revitalize the brand.

Jeffries, who beginning in the early 1990s built the chain into a hot but controversial brand with more than 1,000 stores wrapped around beauty and sexiness, had come under pressure after earnings began sagging last year.

Abercrombie said the current non-executive chairman of the board, Arthur Martinez, will become executive chairman and manage the company with a team of top officials until a new CEO can be found.

"It is impossible to overstate Mike Jeffries' extraordinary accomplishments in building Abercrombie & Fitch to the iconic status the brand now enjoys," Martinez said in a statement.

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"From a standing start two decades ago, his creativity and imagination were the driving forces behind the company's growth and success. Going forward, we are confident in our talented senior leadership team and the steps we are taking to revitalize our brands and business," he said.

Jeffries was closely identified with the Abercrombie brand development, which shocked many with annual catalogs full of near-nude models pitching clothes to teenagers.

But the company turned in a sharp downturn in sales in 2013, to $4.1 billion from $4.5 billion the previous year, with a particular slump in the important Christmas period sales.

Sales have continued to slump this year, with third quarter sales at $911 million down 12 percent from a year earlier.

The company's share have steadily fallen from around $76 at the end of April 2011 to a low of $26.35 on Monday. Shares jumped 6.2 percent to $27.98 Tuesday after the announcement.

$1 = £0.64