The controversial chief executive of Abercrombie & Fitch is stepping down.
The struggling teen retailer announced that Mike Jeffries is retiring.
"It has been an honor to lead this extraordinarily talented group of people," the 70-year-old Jeffries said in a press release on Tuesday morning. "I am extremely proud of your accomplishments. I believe now is the right time for new leadership to take the company forward in the next phase of its development."
The decision to retire was made by Jeffries and the board of directors, which is conducting a search for the next CEO, a source with knowledge of the situation told The Huffington Post. Replacing Jeffries has been high on, if not at the top of, the board’s list of priorities for a long time, the source said. Late last year, activist investors called for changes at the top of Abercrombie, including Jeffries’ ouster.
Jeffries gained notoriety after telling Salon in a 2006 interview that the brand was "exclusionary" and that it only marketed to the "cool kids."
"We go after the attractive all-American kid with a great attitude and a lot of friends. A lot of people don’t belong [in our clothes], and they can’t belong. Are we exclusionary? Absolutely," he said.
The quote was recirculated in 2013 and went viral on the internet as many criticized the company for its bias. One man, Greg Karber, even called for a “brand readjustment” by giving out Abercrombie clothes to the homeless.
The company is in the midst of a desperate turnaround effort as sales continue to fall. The brand is getting rid of its signature logo tees, redesigned stores and pledged to eliminate underperforming locations. But nothing really seems to be working, as HuffPost reported last week.
There are no plans for Abercrombie to abandon the turnaround initiatives that have already been announced, a source with knowledge of the situation told HuffPost.
The new CEO will face a “broken business model,” Eric Beder, an analyst at Wunderlich Securities, wrote in a note on Tuesday, calling it worrisome that the announcement came during the important holiday sales season.
“Frankly, while we are happy to see this change made, the uncertainty in such a crucial timeframe is a key negative,” wrote Beder.
In a note to clients last week, Beder expressed concern that the retailer won’t be able to recover, as it continues to face fierce competition, low store traffic and bleak sales numbers.
Earlier this year, Jeffries lost his job as chairman of the company. In the release Tuesday, Arthur Martinez, the company's current non-executive chairman and incoming executive chairman, praised Jeffries' work as CEO.
"It is impossible to overstate Mike Jeffries' extraordinary accomplishments in building Abercrombie & Fitch to the iconic status the brand now enjoys. From a standing start two decades ago, his creativity and imagination were the driving forces behind the company's growth and success," he said.
Abercrombie declined to comment beyond the statements in its press release.