Embattled teen retailer Abercrombie & Fitch has said Michael Jeffries will step down from his roles as chief executive and board member with immediate effect.
Jeffries, who had long been out of favour with investors, already lost his chairmanship role in a board restructuring earlier this year.
Its shares surged nearly seven per cent in pre-market trade as investors cheered the news.
Arthur Martinez, non-executive chairman since January, has been named executive chairman. His newly created team will manage day-to-day operations while the company searches for a new chief executive.
The fashion brand recently reported a 25 per cent fall in third quarter adjusted net income and slashed yearly profit forecasts. It cited disruption and turmoil" in the teen clothing sector alongside heavy discounting.
Abercrombie and Fitch was once a must-have brand for teenagers but has recently struggled against competition from cheaper, more fashionable competitors such as Forever 21 and H&M.
It has been an honour to lead this extraordinarily talented group of people. I am extremely proud of your accomplishments.
I believe now is the right time for new leadership to take the company forward in the next phase of our development.
Arthur Martinez said in a statement:
Going forward we are confident in our talented senior leadership team and the steps we are taking to revitalise our brands and business.
We are also confident that our search will identify a new leader with the skills and expertise to enable Abercrombie & Fitch to capitalise fully on its growth opportunities and build shareholder value.