Engaged Capital Nominates Candidates For Abercrombie & Fitch Board

Engaged Capital Nominates Candidates For Abercrombie & Fitch Board

Engaged Capital, an activist hedge fund and shareholder of Abercrombie & Fitch Co. (NYSE:ANF) started its board fight against the company by nominating five candidates for election to its board of directors during the 2014 annual stockholders meeting.

In a statement, the activist investor said, “We believe the addition of highly qualified candidates alongside the company’s newly appointed directors can only increase the objectivity and independence of the board.”

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Nominees have decades of retail & brand experience

Engaged Capital nominated its CIO & managing member Glenn W. Welling, Alexander P. Brick, former CEO of Specialty Retail Group, Robert D. Huth, former CEO of David’s Bridal. Michael W. Kramer, former chief operating officer of J.C. Penney Company, Inc. (NYSE:JCP), and Daniel L. Neal, former CEO of Bath & Body Works.

According to the activist investors, the five executives it is nominating to the board of Abercrombie & Fitch Co. (NYSE:ANF) have decades of retail and brand experience, proven ability to execute, financial acumen, and true independence from the board and management team of the company.

Engaged Capital’s Welling pointed out that a board of independent leaders is necessary to set a new direction for Abercrombie & Fitch Co. (NYSE:ANF). According to him, the stockholders have suffered too long under the failed leadership of the board that has lacked of independence necessary to properly act as their fiduciaries.

Engaged Capital history of underperformance

In December last year, Engaged Capital demanded a leadership change in Abercrombie & Fitch Co. (NYSE:ANF) citing mismanagement and a history of underperformance as the primary reasons.

Today, the activist investor reiterated that the company’s leadership is a failure. Engaged Capital said the board has “well-established record of failing investors by approving wasteful capital spending, enriching management at the expense of stockholders, and showing a complete disregard for succession planning.”

Engaged Capital pointed out that the premature extension of the lucrative employment contract of Michael Jeffries, CEO of Abercrombie & Fitch Co. (NYSE:ANF) is a “blatant disregard to stockholders.”

More changes in the future

The activist investor also emphasized the board of directors of the company will make several major decisions in the future including a plan for CEO succession, hiring of brand presidents, and the selection of new chief financial officer

Welling said, “Given the importance of these tasks, we cannot let responsibility for these critical decisions remain in the hands of nine incumbent directors who have failed the company and its stockholders so spectacularly for years.”

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