On Thursday Abercrombie & Fitch Co. said CFO Michael Kramer will leave the company on August 18 to take a similar post with Kellwood Co. On Friday shares of the trendy fashion retailer tanked, closing down nearly 8 percent on a day the overall stock market rose.
Thus investors judged Abercrombie to be worth $393 million less with Kramer out of the picture. Wall Street’s analysts weren’t too happy with his exit, either; both Banc of America Securities and Thomas Weisel Partners downgraded the company’s shares in response to the announcement.
At a meeting with investors hosted by Thomas Weisel last week, “the outgoing CFO assured us that management was not overly concerned about negative (same-store sales) trends, talked extensively about the international growth initiatives, and suggested there is ample margin opportunity from here,” Thomas Weisel analyst Liz Dunn wrote in a report, according to the Associated Press. “We are not sure what to make of those assurances now and who is in charge of delivering.”
To be sure, other developments at the company also seem to be concerning investors. Dow Jones points out that Abercrombie has not yet renewed CEO Mike Jeffries’s contract, which expires December 31, citing Morgan Keegan retail analyst Brad Stephens.
And Abercrombie, a hot fad company among teens and preteens several years ago, reported that in the most recent quarter, sales at stores open at least a year fell 3 percent.