Abercrombie Mike Jeffries
Abercrombie CEO Mike Jeffries is out amid falling sales and shareholder pressure. AFP/Bertrand Guay via Getty Images

Teen apparel retailer Abercrombie & Fitch Co. said Tuesday CEO Mike Jeffries is retiring, effective immediately, amid waning sales, profit and relevance among teenage shoppers who prefer trendy, cheap fashion rather than the brand's preppy, classic looks heavy with logos.

Jeffries, 70, who has been under intense shareholder pressure to turn the company around, will also step down from the retailer's board of directors. The company's non-executive chairman, Arthur Martinez, will become executive chairman and oversee day-to-day operations until the board appoints a new CEO. A search firm will consider both internal and external candidates. The company's shares soared nearly 10 percent in early trading.

"It has been an honor to lead this extraordinarily talented group of people," Jeffries said in a statement. "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 its development."

Jeffries, who took over in 1992, came under fire last year from activist hedge fund Engaged Capital, which said he should be replaced and owns about 0.5 percent of its stock, the Wall Street Journal reported in December. He has been blamed for Abercrombie and Hollister's lackluster performance, though the retailer has been gradually selling fewer clothes prominently featuring its logo. Bowing to investor pressure, the retailer stripped Jeffries of his chairman duties in January.

Last week, the company disappointed investors with much lower-than-expected third-quarter earnings of $18.2 million, or 25 cents per share. Analysts had expected earnings of 41 cents per share. A year earlier, the company reported a loss of $15.6 million, or 20 cents per share.

Abercrombie's shares have fallen about 20 percent over the year.

In recent years, shareholders have complained about his extravagant use of company funds on travel and for his partner Matthew Smith's involvement in the business, though he's not employed by Abercrombie. Jeffries has also come under fire for saying he wanted only "thin and beautiful" people to shop in his stores and deciding not to offer plus-sized clothes.

"It is impossible to overstate Mike Jeffries' extraordinary accomplishments in building Abercrombie & Fitch to the iconic status the brand now enjoys," Martinez said. "We are also confident that our search will identify a new leader with the skills and expertise to enable Abercrombie & Fitch to capitalize fully on its growth opportunities and build shareholder value."

The company's shares were up $1.62, or 6.2 percent, to $27.97 in midday trading Tuesday.