(AP Photo/Mark Lennihan)

Michael Jeffries, the longtime and controversial chief executive of Abercrombie & Fitch, is checking out of the retailer he has run for more than 20 years, stepping down from his roles as both CEO and director. The company announced Tuesday that his departure is effective immediately. It did not name a permanent successor to take his place.

Jeffries, 70, has led the company since 1992 and built Abercrombie into an icon of the teen fashion industry. Yet he came under fire last year for comments that resurfaced about how "a lot of people don't belong" in its sexed-up, all-American clothing. He also has been under scrutiny for the company's recent financial struggles, as the brand further loses its luster among young adults.

While the company did not detail the circumstances of his departure, Jeffries said in a statement that he thinks "now is the right time for new leadership to take the company forward in the next phase of its development."

In its third quarter results, announced last week, Abercrombie reported that comparable store sales dropped 10 percent from the year prior. It also lowered its outlook. Before shares rallied Tuesday in response to the news of Jeffries' retirement, stock was down nearly 20 percent this year.

The company said its current non-executive chairman, Arthur Martinez, would become executive chairman. Martinez, a veteran of Saks and Sears, is also now charged with leading a group of Abercrombie executives who will manage the company on a day-to-day basis until it names a new CEO.

The news follows pressure from investors, as well as a number of recent changes to the retailer's board and leadership ranks in an effort to steer a turnaround.

A year ago, amid calls by some investors to replace Jeffries, the company restructured his employment agreement. In January, the company named three new directors, including Martinez, to its board and stripped Jeffries of his chairman title. It also created a new chief operating officer position to help manage the company, and named two outside brand presidents in October to manage the company's major labels.

Abercrombie has also been adjusting the look and feel of its retail — lightening up its nightclub-dark stores, ditching the prominent logos on its clothing and redoing the fronts of its Hollister shops. Neil Stern, a senior partner with retail consultancy McMillanDoolittle, says that while Abercrombie was slow to respond to teens' changing tastes, it has been working to catch up by expanding its outlet stores, focusing on international growth and shifting the Hollister brand to more closely mimic fast-fashion retailers like H&M and Forever 21.

"They're doing the things most outsiders would say you need to do," Stern says. "The question is, is that going to be enough?"

The teen retailing segment, which Jeffries played a big role in creating, is now "under attack," according to Stern. Before Abercrombie, teens shopped at the same places that were also selling to their parents, such as the Gap, Tommy Hilfiger and department stores. Then Jeffries turned Abercrombie into a fashion mecca exclusively for youth, luring them in with its premium-priced image and its advertising that featured fewer shirts than it did shirtless models.

That catalyzed a rise in teen stores. But now that young shoppers have moved their dollars toward e-commerce and replaced logo-emblazoned clothing with new fashion preferences, the sector is undergoing a seismic shift. "Usually you can say this retailer is struggling and this one's winning," Stern says. "But I can't name you one winner in the segment that is a dedicated teen specialist."

All those changes mean Jeffries' departure isn't a big surprise, Stern says, though the timing was puzzling given that it comes amid the critical holiday shopping season. "Most retailers don't want to be rocking the boat before the holidays are over," he says.

A source close to the company said that succession is something the board has been discussing for some time, and that —  because holiday plans are already set — a distracted workforce is not a concern. That source also said the departure was a joint decision by Jeffries and the board, and unrelated to the controversial comments Jeffries made in the past.

In May of 2013, a story went viral online about how Abercrombie did not sell clothing for larger-sized women. It referred to a Salon article from 2006, in which Jeffries was quoted as saying, "Are we exclusionary? Absolutely." He also spoke of hiring good-looking people in the store, because "we want to market to cool, good-looking people. We don’t market to anyone other than that.”

The article prompted an explosive response, inspiring floods of comments on the company's Facebook page and a Change.org petition signed by more than 75,000 people, calling for the brand to carry plus-sized clothing. Ultimately, Jeffries apologized for the comments. The company also subsequently launched an anti-bullying initiative and said it would begin carrying larger sizes.

It is not just Jeffries' departure as CEO that will provide a fresh start for the company; he will also be stepping down from the board. Noel Tichy, a professor at the University of Michigan and author of the recent book Succession, questioned why Abercrombie wasn't ready to announce a new chief executive — but did say it was a wise move for Jeffries to relinquish his board position at the same time as his CEO role.

"Don't have the old man looking over the new guy's shoulder," Tichy says. "There is all kinds of psychological baggage that comes with the ex-CEO sitting there, second-guessing the new one."

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