Show Abercrombie & Fitch's CEO the Door

 | Dec 03, 2013 | 1:00 PM EST
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Activist investor Engaged Capital came out with a public plea to Abercrombie & Fitch's (ANF) board today: Please get rid of CEO Mike Jeffries. The letter issued to the companyu's board stated facts as obvious as the sky is blue, including a history of bad business decisions and personal public bad behavior, both of which have contributed to a two-year, 31% decline in the stock vs. +64% for the Market Vectors Retail ETF (RTH).

It is no secret the teen space is as tough as it gets in retail. Fickle teens and the non-stop discounting race since the recession have dragged the whole space into a gross margin black hole at times. The emergence of fast fashion is also kicking teen retail booty and that will only get worse. However, the company has the distinction of being in a bad space with a bad CEO who continues to make bad decisions.

Here is what needs to happen: If Abercrombie & Fitch has any plan on continuing to charge outrageous prices in the U.S. and even more outrageous prices internationally (which accounts for 30% of its business), the company has to start selling product that teens like (quality, trend). Simply put, teens report Abercrombie & Fitch and Hollister are not cool anymore. Turning around the cool ship is going to be no small task, and that starts with a new management team.

When Abercrombie & Fitch reported its latest disastrous quarter, I went on CNBC and stated what every sell-side analyst was thinking but couldn't say out loud – in  fact, Engaged Capital quoted from this segment in its letter to the board. The best gift under the tree this year would be Jeffries' resignation.

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I reached out last week to my close friend Ken Shreve, who is a prominent writer for the IBD.  I asked Ke...
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