Abercrombie & Fitch stripped CEO Mike Jeffries of his chairman duties, bowing to investor pressure to reduce his control over the struggling company.
Shares of the company were up 4.8 percent, to $36.27, at the close Tuesday after A&F also abandoned a “poison pill” aimed at blocking hostile buyout bids and named three new board members.
The moves come nearly two months after the company extended Jeffries’ contract by a year, ignoring shareholder Engaged Capital’s call to replace the CEO.
“It seems like it’s a political and respectful way of approaching a CEO issue without saying we’re going to throw you to the curb,” said Nomura Equity Research analyst Simeon Siegel.
Jeffries, who has been CEO for nearly 22 years, has faced criticism for failing to stop the once-edgy retailer from ceding market share to “fast fashion” chains such as Forever 21 and Inditex’s Zara over the past couple of years.
Analysts have raised concerns about its focus on marketing and cutting costs rather than on improving merchandise in a bid to bring back teen shoppers.