Abercrombie & Fitch Co. has completed the search for one of its divisional brand presidents, naming Christos Angelides president of the Abercrombie & Fitch and abercrombie kids brands.
This story first appeared in the June 11, 2014 issue of WWD. Subscribe Today.
Angelides, 51, will report to A&F’s chief executive officer Michael Jeffries. The ceo, in a telephone interview, said Angelides will be responsible for all product and customer-facing activities — such as merchandising, planning and design — as well as be accountable for the financial performance of the brands.
Angelides currently is group product director for Next plc, a $6 billion fashion retail and Internet chain based in the U.K. He has spent his entire career at Next, holding a number of senior management roles, including general manager of Next’s sourcing office in Hong Kong. He also has experience with product development in both the women’s and men’s categories. According to Next, Angelides has stepped down from his board position at the company, effective immediately.
A&F said in December it was searching for two brand presidents and is still in the middle of the search process for its Hollister divisional brand president.
Jeffries declined to elaborate further on the Hollister search, but a spokesman said, “We are pleased by the quality of candidates we have seen for the Hollister brand president role and are making progress with the search.”
Jeffries told WWD that Angelides will start Oct. 6. According to the ceo, Angelides will stay on at Next for a short time per his employment agreement to help with the transition. He noted that Next is “releasing Angelides three months early” from his obligations there so he can start his new position sooner at A&F.
Angelides said, “Abercrombie & Fitch is a storied brand with global appeal and a clearly defined aesthetic, and I am [pleased] to help the brand continue to grow.”
Neal Lindsey, sourcing director at Marks & Spencer and former managing director at Next Sourcing Ltd., said, “I watched Christos and Lord Wolfson [ceo of Next] build Next into the biggest fashion retailer in the U.K. They made a formidable team and I know that Christos has the drive and ability to repeat the success at Abercrombie & Fitch.”
According to a regulatory filing with the Securities and Exchange Commission Tuesday, Angelides will receive an annual base salary of $995,000. He will also receive a one-time sign-on bonus of $100,000 and may receive an additional bonus of $512,000 to compensate him for the forfeiture of his 2014 bonus from Next. He also can participate in A&F’s incentive compensation performance plan, as well as other one-time incentive payments connected with his relocation from the U.K. to Ohio, where A&F is based.
The hiring of Angelides is part of a series of moves to shake up the company and bolster retail talent as the specialty chain completes its long-term strategic restructuring.
In January, A&F separated the positions of chairman and ceo, allowing Jeffries to focus on his expertise in day-to-day operations and naming Arthur Martinez, former chairman and ceo of Sears, Roebuck & Co., as non-executive chairman to focus on corporate strategy and corporate governance. The number of board members was also increased to 12, with the addition of Martinez and the appointments of two others. The three are considered independent directors, a nod to pressures back then from activist investor Engaged Capital. Engaged and A&F settled their differences last month, with the two agreeing to nominate four new independent directors to the company’s board at its next annual shareholders’ meeting, set for June 19.
One of the problems facing all teen retailers is the macroeconomic backdrop impacting teen spending.
In an interview earlier this year, Martinez said, “I think there are several forces influencing the teen market, the largest among those is macroeconomics. You have teen unemployment north of 20 percent so there’s not a lot of spending money coming to teens. Some research shows that the share of wallet from teen spending on clothing has gone down and what’s going up is personal electronics,” Martinez said. He noted that when teens do spend on apparel, they’ve been focused on tops and bottoms, where there’s both fashion and newness.
For A&F, its fortunes have shown improvement, and it is doing better than its “A” peers — Aéropostale Inc. and American Eagle Outfitters Inc. Jeffries said that’s due in part to improved product from its A&F women’s line. A&F on May 29 posted results that included both a lower loss and higher revenues than expected. The net loss for the first quarter ended May 4 was $23.7 million, or 32 cents a diluted share, on revenues of $822.4 million. Comparable-store sales were down 4 percent, with an 11 percent decline in retail store sales offset by a 27 percent increase in direct-to-consumer revenues.
So how does Angelides and his experience help A&F stay competitive and at the forefront of the minds of its targeted shopper?
According to Jeffries: “As we discussed on our first-quarter earnings call, dresses, outerwear and jeans all had positive comps. We continue to make good progress in evolving our assortment and increasing brand engagement. Christos’ focus and understanding of the consumer will help us continue to improve.”
Jeffries added that Angelides brings 28 years of experience managing a team of 800 associates with broad general management responsibilities and experiences. “He is a great cultural fit and shares the same values we do as a company: team oriented, smart, humble, optimistic and nice. During his tenure, Next has posted strong growth in sales and profits, and the firm has generated significant shareholder returns. In addition, Christos’ focus and understanding of the consumer will make him an asset to our brands,” Jeffries said.
Jefferies analyst Randal J. Konik, who has a “buy” rating on shares of A&F, said the appointment of Angelides is viewed “very positively given Mr. Angelides’ extensive international retail experience, which should serve the global prospects of A&F well.”
FBR Capital Markets’ Susan Anderson, who has an “outperform” rating on the stock, viewed the hiring as a positive for brand differentiation, given his “solid background in sourcing and women’s wear, key areas that A&F has targeted for improvement.”
Herbert Mines Associates conducted the search for the new A&F brand president.
Shares of A&F slipped 0.05 percent to close at $40.47 in trading Tuesday on the Big Board.