Abercrombie & Fitch has finally settled its months-long battle with activist investor Glenn Welling's Engaged Capital by agreeing to replace four longtime board members at its annual meeting this year.
Welling, who has been pressuring Abercrombie to fire controversial Chief Executive Officer Mike Jeffries and to consider selling the company, nominated five people to the teen retailer's board in February after failing to reach an agreement with the company in private negotiations. While Abercrombie added three new directors to its board in January in response to Welling's demands for change, the investor believed that they wouldn't be able to make a difference against the retailer's nine incumbent directors.
Abercrombie avoided a showdown in June at its annual meeting with today's announcement, which has Welling's blessing. Only one replacement was suggested by Engaged Capital — Diane Neal, the former head of Bath & Body Works. The other three appear to have been picked by Abercrombie. Notably, they're all women: Sarah Gallagher, a former Ralph Lauren executive; Bonnie Brooks, vice chair of Hudson's Bay department stores; and Stephanie Shern, of Ernst & Young.
Engaged agreed to withdraw its own nominees and vote with the company. Welling said he is "pleased to have worked constructively with the company to this end," adding that the new directors, along with Abercrombie's appointment of a new chairman and the termination of a shareholder rights plan earlier this year, will help "set a new direction for the company."
The four directors departing Abercrombie do not have any retail experience. They include Elizabeth Lee, the headmistress of a local uniforms-required private school; Lauren Brisky, the former financial liason for Vanderbilt University; John Kessler, the owner of a local real estate development company; and Kevin Huvane, a partner at Creative Artists Agency.
However, Archie Griffin, the two-time Heisman Trophy winner, who also lacks retail experience, will remain on the board.