Hedge fund Engaged Capital has called for the head of Abercrombie & Fitch CEO Michael Jeffries as a prelude to selling the retailer to a private-equity firm.
California-based Engaged said Jeffries, whose contract expires on Feb. 1, is a major stumbling block to a sale of the company and that there's "no qualified successor" lined up. "The board needs to come to the same conclusion that everyone else has—it is time for new leadership at Abercrombie & Fitch," Engaged chief investment officer Glenn Welling wrote.
Abercrombie shares have fallen 25% this year and it is set to miss analysts' earnings expectations for 2013 by a wide margin.
The New Albany, Ohio-based company said it has "had extensive discussions with many of its shareholders, including Engaged Capital," and that it looks "forward to continuing our dialogue with shareholders as we execute on our long-term plan."
Engaged owns less than 1% of Abercrombie's shares.