The Aging of Abercrombie & Fitch
January 28, 2015 - fall Denim
He combined a anticipation world, and copiousness of teenagers wanted to be partial of it. For a decade straight, Abercrombie’s distinction increasing any year as it stretched to 600 stores. During a 2001 recession, Abercrombie’s sales started slowing, yet Jeffries didn’t reduce prices. He mostly waded into controversy. Abercrombie stocked T-shirts that said, “Wong Brothers Laundry Service: Two Wongs Can Make It White.” After Asian American students orderly a protest in 2002, a association pulled a shirts from a shelves. A month later, it introduced thongs for preteen girls printed with “Eye Candy” and “Wink Wink.” Parents protested, and Abercrombie stopped offered those as well.
At a finish of 2002, an researcher asked Jeffries if a chain’s parsimonious shirts and low-riding jeans competence be unnecessarily incompatible some teenagers from selling there. “Does it bar people? Absolutely. We are a cold brand,” Jeffries replied.
“There was a formula filter that pronounced all indispensable to be lovable and sexy,” says Durando. “It didn’t matter that we were apropos some-more slight in terms of who was means to wear a clothes.”
Abercrombie infrequently seemed like formula for something else. Asian American, African American, and Hispanic college students in California sued Abercrombie in 2003 for secular taste in a employing practices. The U.S. Equal Employment Opportunity Commission assimilated a case. The suits purported that minorities were incited down for sales positions, shunted to stockrooms, and had their hours reduced, infrequently to zero, after managers got word that their staff didn’t demeanour Abercrombie enough. The association pronounced it didn’t endure taste and staid a suits for $50 million yet revelation wrongdoing. As partial of a deal, Abercrombie was theme to a agree direct that compulsory it to sinecure a farrago officer and give swell reports to a district court. (This summer a farrago officer left, and Abercrombie gave a responsibilities to another executive.)
In a autumn of 2004, Jeffries introduced Ruehl No.925, a line of garments for group and women in their mid- to late 20s. He described intensity business as carrying graduated from college in Indiana and changed to New York City. The Ruehl stores—located in malls—had genuine section facades, wrought-iron fences, and antiqued windows to advise a Greenwich Village city residence owned by a fictitious Ruehl family. Ruehl was a usually formula in a AF portfolio authorised to sell black clothes. “He had such high standards. It was inspiring,” says Durando, who led a women’s pattern group for Ruehl.
Senior executives came and went, nothing means to strive any change over Jeffries. If they had ideas opposite from his, it didn’t spin out well, says a former executive who worked on a business side. Jeffries talked of timid one day yet pushed out intensity successors. The residence of directors, stoical mostly of inner businesspeople, deferred to him in this matter, and many others.
In 2005, Jeffries non-stop a grand AF store on Fifth Avenue, nearby Prada and Gucci. The shirtless models during a opening were hold to high standards: Amy Zehrer, a executive in assign of stores, after told investors that managers checked on any man any 30 mins to find out “how many photos are being taken with him and to see if it’s on track.”
When Abercrombie non-stop a store in 2007 around a dilemma from London’s Savile Row, Jeffries was filmed by a BBC walking down a transport in flip-flops. “I trust we are going to be here 200 years from now, vital in peace with these businesses,” he said.
Jeffries introduced a slip brand, Gilly Hicks, in 2008. It had an elaborate behind story about a lady named Gilly Hicks and her granddaughter who lived in a estate residence in Australia. When Beverly House assimilated Abercrombie to rise Gilly Hicks, she visited Sydney to see what a estate residence looked like. “At one indicate we attempted a building with antique Parisian stone, and it became too bulky,” she says. “So we jackhammered it up. We went approach over budget, yet that was Mike’s world.”
House says Jeffries hated a approach unresolved bras looked, so she put many in drawers. “He suspicion all those bras, with those dual large mounds of froth entrance during you, was offensive.”
In 2009, Abercrombie sealed all 29 Ruehl stores. The formula had mislaid $58 million a year before. The Gilly Hicks stores survived until 2013; a underwear and bras are still accessible in Hollister stores and online.
Abercrombie’s same-store sales forsaken 13 percent in 2008 and 23 percent in 2009, and yet a association remained profitable, signs began to emerge that Jeffries’s celebrity competence overcome a business, generally if it wasn’t growing. In 2010 a residence singular his use of a company’s Gulfstream G550 to $200,000 annually, nonetheless it also gave him a $4 million transport stipend.
In 2010, Michael Bustin, 53, a commander who flew a Abercrombie plane, filed an age taste lawsuit opposite a company. Abercrombie’s ubiquitous warn pronounced a fit was yet merit. The censure enclosed a 40-page “Aircraft Standards” manual. As Bustin put it in his deposition, “Every singular aspect that we can suppose that influenced a aeroplane or a function in it was tranquil by Abercrombie Fitch, specifically, Michael Jeffries and Matthew Smith.” The 4 masculine organisation members (models supposing to Abercrombie) had to wear jeans, boxers, polo shirts, and flip-flops. The primer specified a seating arrangements for Jeffries’s 3 dogs, a length of a ladle Smith compulsory for his tea, and a correct approach to respond to requests (“No problem”), overlay washcloths, vacuum, dust, and benefaction magazines. When Jeffries was called to give a second deposition in a winter of 2012, Abercrombie staid a box yet revelation wrongdoing. The sum weren’t done public.
In Aug 2014 a grant account in Florida claimed a residence breached a fiduciary duties by overpaying Jeffries and remarkable his partner was authorised to act like an executive. Lawyers performed inner papers that showed Smith, who had no central purpose during Abercrombie, had done 170 unannounced visits to stores from Aug 2011 to Nov 2013, “providing reports on stores’ appearance, staffs, and atmosphere,” according to a complaint. He had a “direct role” in assessing store openings and closings outward a U.S. On a jet, he perceived sales reports. (Smith couldn’t be reached for comment.) Earlier this month, a association staid yet revelation wrongdoing. In justice filings, lawyers for a grant account pronounced Abercrombie had already softened a corporate governance and had concluded to designate a arch ethics and correspondence officer.