Abercrombie CEO Michael Jeffries out

New York - In an abrupt move, Michael Jefferies, the longtime and often controversial chief of Abercrombie & Fitch, has retired as CEO and stepped down from the company’s board, effective immediately. His retirement caught the industry by surprise, particularly since it comes in the middle of the crucial holiday selling season.



Until a permanent successor is found, Abercrombie will be run by a newly created Office of the Chairman, which includes chairman and industry veteran Arthur Martinez; COO Jonathan Ramsden; Christos Angelides, who oversees the Abercrombie & Fitch division; and Fran Horowitz, who leads Hollister.



"It has been an honor to lead this extraordinarily talented group of people," Jeffries said in a statement. "I believe now is the right time for new leadership to take the company forward in the next phase of its development."



Jeffries became CEO in 1992. He is credited with turning the then sluggish brand into a four-billion-dollar teen retail powerhouse, one that was as famous for its pricey logo-branded apparel as it was for its sexy advertising and good-looking sales associates. Abercrombie stores, with their dimmed interiors and loud music, took on a nightclub ambience.



But during the past couple of years, Abercrombie has come under increased criticism for excluding plus-sized shoppers and minorites in its stores and work force. The brand lost its luster, a victim of changing attitudes and increased competition from fast-fashion, value-priced giants like Forever 21 and H&M as teens lost their penchant for logo apparel in favor of less expensive on-trend fashions. Teen spending has also shifted to technology and food.



Abercrombie acknowledged the fashion shift: In August, the company announced it would get rid of the logo on its apparel in North America and was toning down the nightclub vibe in its stores, making them open and brighter.



But the current year has proved tough for the retailer. Sales fell 12% in the third quarter ended Nov. 1, and the chain cut its profit outlook for the year.



Same-store sales have dropped for seven consecutive quarters in the U.S. and abroad.



Jeffries came under fire in 2013 from an activist hedge fund that pushed for him to be replaced and for the board to consider a sale of the company. But the board resisted, hailing Jeffries as a visionary and renewing his contract. However, it took away his chairman’s title.



Jeffries himself has begun to appear outdated. His philosophy (“We want to market to cool, good-looking people,” is one of his most quoted statements) seemed to resonate less and less with the public, including, and most especially, teens.



Abercrombie & Fitch had 834 stores in the U.S. and 166 stores across Canada, Europe, Asia, Australia and the Middle East at the end of the third quarter.