Quarter after quarter last year, American Eagle Outfitters CEO Robert Hanson had to report disappointing results and assure investors that the South Side-based teen clothing retailer was working aggressively to turn things around.
Other teen retailers were also having problems, but that didn't help the company's stock, which kept sliding lower.
On Wednesday as the markets closed, the company announced that Mr. Hanson would be leaving, effective immediately. "The board will initiate a search for a permanent chief executive officer," according to the company's announcement.
On an interim basis, the chief executive's role will be filled by Jay L. Schottenstein, the company's largest investor and executive chairman of the board.
In a sign meant to reassure the market that American Eagle is in good hands as it searches for a new CEO, the company said Roger S. Markfield, vice chairman and executive creative director, has agreed to postpone his planned retirement. Mr. Markfield, who joined American Eagle in 1993, has stepped in during previous challenging moments. Mr. Markfield was listed as 71 in a regulatory filing last April.
Still, the stock quickly slid in after-hours trading as investors heard the news. A year ago at this time, American Eagle shares had been trading above $20; they closed Wednesday at $14.31.
Just last week, Mr. Hanson told analysts at an investment conference that it had been a tough year. He said the macroeconomic climate was rough but admitted that American Eagle had caused some of its own problems.
"The first thing we want to talk about was execution because we did not execute as we should have in 2013 and we would attribute at least half of our underperformance to weak execution," he told the analysts. "That's across the assortment. Because in this business, product's everything."
Despite his disappointing reports, analysts seemed willing to give him time to improve things. In a December report issued after third quarter results, Jefferies analyst Randal J. Konik wrote, "However, looking ahead to next year, we think the clouds may part ... for this company. We like the CEO, the brand is still intact and we believe valuation is becoming more favorable."
Other teen retailers have struggled and that helped lead to a round of markdowns and discounts over the holidays as they all fought for market share. American Eagle reported earlier this month that total revenue for the nine weeks ended Jan. 4 fell 2 percent and sales at stores open at least a year fell 7 percent.
Mr. Hanson, who had been global president of the Levi's brand before coming to American Eagle, spent much of his tenure working to restructure the business to be more accessible to shoppers through digital channels -- including announcing plans to close a distribution center in Warrendale in favor of a bigger, more e-commerce friendly operation near Hazleton -- and expanding internationally with the chain entering markets like Mexico and the Philippines.
Where his departure leaves the company isn't clear.
Mr. Hanson's appointment -- which was announced in November 2011, although he didn't take over the job until early 2012 -- had followed months of speculation that American Eagle could be a candidate for a buyout, as it had struggled to improve results.
In Wednesday's announcement, Mr. Schottenstein said, "On behalf of the board of directors, I want to thank Robert for his contributions during his tenure and wish him well in his future endeavors.
"I look forward to working closely with Roger and our talented team to capitalize on the significant potential of our brands and to position the company for growth and long-term success."
Teresa F. Lindeman: firstname.lastname@example.org or at 412-263-2018.
Teresa F. Lindeman: email@example.com or at 412-263-2018. First Published January 22, 2014 5:07 PM