Abercrombie Shareholder Wants CEO Michael Jeffries Booted

12/3/13 2:01PM EST

Abercrombie Shareholder Wants CEO Michael Jeffries Booted Abercrombie Shareholder Wants CEO Michael Jeffries Booted

Image via Flickr/ Sam Davyson

Michael Jeffries has made a reputation for himself, one that the public doesn’t particularly like. The Chief Executive Officer of Abercrombie & Fitch has been quoted during some seriously foot-in-mouth moments, and he’s proud of the company’s exclusive demographic.

In one instance he explained, “We want to market to cool, good-looking people. We don’t market to anyone other than that.” Such remarks have led to the alienation of larger, older consumers. To be clear, the CEO’s idea of larger is anyone at a normal, average weight; his idea of older is probably about 16 years old (which, it’s worth noting, is how long the 69-year-old has held the title of CEO).

It comes as no surprise that at least one of Abercrombie’s shareholders is finally speaking up about the company’s public image problem. Shareholder Engaged Capital LLC sent a letter to the company this morning, urging the board of directors to find a new CEO when Jeffries’s contract expires in February.

Calling For Change

The nine-page letter, available in its entirety below, claims that the company’s “perennial underperformance is a result of a failure of leadership.”

The letter, penned by Engaged Capital’s managing member Glenn W. Welling, goes on to say, “Publicity around Mr. Jeffries’ past public statements and the apparent intrusion of his private life into Company business have caused unnecessary controversy, no doubt damaging the Company’s public profile, employee morale, and likely sales.”

Welling writes, “Given the Company’s history of operational missteps, taken together with Mr. Jeffries’ age and his increasingly controversial reputation, the Board must not let this opportunity pass,” referring to the expiration of Jeffries’s contract.

Welling suggests another alternative: selling the company altogether. “A sale of the Company to a private equity buyer may represent the best option for shareholders,” he writes.

The Result: Probably Not Much

Experts agree that booting Jeffries could be the best move for the clothing retailer. Bridget Weishaar, an analyst with Morningstar Inc., told Reuters, “A little fresh blood would definitely benefit the company.”

And if Jeffries were to be replaced, he wouldn’t leave the company empty-handed. His contract states that he would collect $100 million should the company appoint a new CEO.

Still, it’s unlikely we’ve heard the last of him. Weishaar pointed out that the board of directors has been very supportive of him throughout his mishaps. Further, although the letter is receiving plenty of media attention, Engaged Capital owns just 400,000 shares of Abercrombie, less than 1 percent of the total. Weishaar concluded, “I’d be highly doubtful if this letter changes anything.”

Engaged Letter to ANF