Engaged Capital is showing some muscle, pushing for more independence in the makeup of Abercrombie & Fitch Co.’s board.
The hedge fund, which owns nearly 0.6 percent of the outstanding shares of Abercrombie, on Thursday disclosed its five nominees for election to the Abercrombie board at this year’s annual meeting. The five are Alexander P. Brick, former chief executive officer of Specialty Retail Group; Robert D. Huth, former ceo of David’s Bridal; Michael W. Kramer, former chief operating officer of J.C. Penney Co. Inc. and former ceo of Kellwood Co., as well as a former executive at Abercrombie; Diane L. Neal, former ceo of Bath & Body Works and the former president at Mervyn Stores when owned by Target Corp., and Glenn W. Welling, chief investment officer and managing member of Engaged Capital.
Welling said the company needs a board of independent leaders who can “set a new direction for Abercrombie.” He added: “For far too long, stockholders have suffered under the failed leadership of a board that has lacked the independence necessary to properly act as our fiduciaries.”
Last month the teen retailer split the positions of chairman and chief executive officer and named Arthur Martinez, 74, non-executive chairman. Michael Jeffries, 69, who had been chairman for 18 years, remains chief executive officer and a director.
Abercrombie also moved to bolster its retail talent on its board, increasing the number of board members to 12 with the appointments of Martinez; Terry Burman, chairman of Zale Corp., and Charles R. Perrin, former chairman and ceo of Avon Products Inc. The three are considered independent directors.
Abercrombie’s Martinez said, “As we have communicated during numerous discussions with Engaged Capital, I am committed, and the entire [Abercrombie] board is committed, to continue taking significant steps to strengthen and enhance corporate governance as the company moves into the next phase of growth.”
Sources said all incumbent directors are expected to run for reelection. Given the length of tenure for nine incumbents, these sources said should all five of Engaged Capital’s nominees get elected, along with the three newly appointed directors earlier this month, Abercrombie’s board would be controlled by a majority of independent directors for the first time in years.
One source familiar with Engaged’s position said the hedge fund is looking for new leadership that can effect a viable strategy to turn around the company, particularly the positioning of its core Abercrombie and Hollister brands to the female consumer. This individual also said that “Engaged has never said it was pushing for a sale” of the company, and that it wants a “new team that would be open to evaluating all options to creating value” for shareholders.
Michael Appel, president of restructuring consultancy firm Appel Associates, said, “The issue at Abercrombie is whether you really have an independent board, given the current composition. They just gave Jeffries a new contract. How independent are they? Take a look at how long it took them to separate the chairmanship from the ceo position. So the question is, did the board do enough with that change, or did they do this as a defensive measure to entrench themselves?”
Harrods plans to remove the famous statue of Princess Diana and Dodi Al Fayed from the bottom of the Egyptian escalators and hand it back to Mohamed Al-Fayed. “We are very proud to have played our role in celebrating the lives of Diana, Princess of Wales and Dodi Al Fayed at Harrods and to have welcomed people from around the world to visit the memorial for the past 20 years,” said Michael Ward, Harrods managing director. “With the announcement of the new official memorial statue to Diana, Princess of Wales at Kensington Palace, we feel that the time is right to return this memorial to Mr. Al Fayed and for the public to be invited to pay their respects at the palace.” More on the news, with reporting by @loreleimarfil, at WWD.com. #wwdnews
@prada is introducing a new project at its men’s fall 2018 show this Sunday: “Prada Invites.” The fashion house invited four celebrated creative minds – @ronanaerwanbouroullec, Konstantin Grcic, @herzogdemeuron and @rem.koolhaas – to each create a unique item with its iconic nylon material. The designs will be unveiled on the runway show, which will take place at the company’s warehouse in Viale Ortles 25. #wwdfashion #mfwm (📷: @martinocarrera)
@kering_official is spinning off its stake in puma in an effort to focus on its luxury brands, the brand operator announced yesterday. “We are proud to have supported the turnaround of Puma, which now has unrivaled capabilities to take full advantage of the specific dynamics of its global markets and is poised to achieve substantial growth,” said François-Henri Pinault, Kering’s chief executive officer and chairman. Artémis will become a “long-term strategic shareholder” of Puma with a 29 percent stake. #wwdnews #wwdfashion (📷: @jilliansollazzo)
The fashion world mourns for celebrated street style photographer, Nabile Quenum, who died at age 32 in Paris.
Quenum, creator of the fashion blog “J’ai Perdu Ma Veste,” was a fashion week fixture, and regularly shot for New York magazine’s The Cut, among other outlets, and brands such as Louis Vuitton, Moncler and Adidas. He was also actively involved in the #NoFreePhotos initiative, which kicked off in the fall. Read more about Quenum in @kbsmoke's story on WWD.com. #wwdnews
@verwanggang and @maisonladuree have teamed up on a dessert collab called Vera Wang Pour Ladurée. The collection, which launched this week, features a specialty macaroon, as well as a wedding cake inspired by one of the designer’s gowns. “I could not imagine a more delicate or sophisticated creation to grace any couple’s celebration,” said Wang. #wwdfashion