Activist investor Engaged Capital fired off a letter to Abercrombie & Fitch’s (ANF) board of directors on Tuesday urging the teen apparel maker to find a new CEO or consider a sale of the struggling company.

The move by Engaged Capital, which said it owns about 400,000 shares of A&F, drove the company’s shares 5% higher.

The activist investor cited A&F’s “operational missteps," CEO Michael Jeffries’ age and “his increasingly controversial reputation.” 

Jeffries, 68, is credited with creating the valuable Hollister brand and repositioning A&F. His contract is up for renewal on February 1.

“While losing Mr. Jeffries’ leadership may have been negatively perceived in the past, it should now be abundantly clear that a transition in leadership is not just needed, but absolutely required, to restore investor confidence in the company’s future,” Glenn Welling, managing director at Engaged Capital, wrote in the letter.

In an emailed statement, an A&F spokesperson said the company is "committed to creating value" and welcomes input from shareholders. The apparel maker said over the past several months it has had "extensive discussions" with many investors, including Engaged Capital. 

"We look forward to continuing our dialogue with shareholders as we execute on our long-term plan," the spokesperson said. 

The pressure comes as A&F’s shares have badly underperformed the broader markets this year, dropping 29% as of Monday's close, compared with a 26% rally for the S&P 500.

Jeffries became CEO of A&F in February 1992 and was also given the chairman title in May 1998.

Engaged Capital said a sale of A&F to a private-equity firm “may represent the best option for shareholders.” However, it said conversations with PE firms and industry insiders reveal that Jeffries’ “presence represents a major stumbling block to a transaction."

A number of analysts have recently pointed to A&F as an attractive leveraged buyout candidate.

Among the operational missteps that Engaged cited: an overbuilt U.S. store base, low employee morale and a lack of succession planning. Engaged said conversations with directors confirmed there are “no internal successors to Jeffries.”

The activist shareholder urged the board to immediately launch a search for CEO candidates who can help right the ship.

Wall Street applauded the pressure, lifting A&F’s shares 5.67% higher to $35.95.

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