Mike Jeffries, the previous CEO of Abercrombie & Fitch, was arrested on Tuesday in Florida, accused of intercourse trafficking and utilizing his perch atop the style clothier to coerce males into intercourse for an opportunity to mannequin for the model.
Based on the indictment, Jeffries, his companion Matthew Smith, and an worker of theirs, James Jacobson, allegedly ran a world intercourse trafficking and prostitution ring from 2008 to 2015, a interval that largely overlapped with Jeffries’s time as CEO from 1992 to 2014.
Jeffries was ousted from the corporate practically a decade in the past, however the newest allegations are paying homage to that sex-tinged scandals that plagued his tenure, together with a management model that nearly sank Abercrombie & Fitch.
Abercrombie’s historical past dates to 1892, when it specialised in clothes and baggage for vacationers and outdoor fans. However when Jeffries took the helm in 1992, he started reworking Abercrombie into the premiere teen retailer of the Nineties and early aughts, rebranding it with logo-bedecked clothes and a hyper-sexualized preppy ethos. The corporate launched catalogs that some critics mentioned on the time verged on soft-core porn, and staffed buff, half-naked younger males at retailer entrances. Jeffries additionally discovered nice success in launching the surfer-adjacent Hollister model in 2000.
Ultimately a few of Jeffries’s eyebrow-raising habits got here to the floor. In early 2010s information experiences on his excesses included a questionable use of firm funds on journey, a giant function for his partner in operating the enterprise, a handbook with detailed directions on how he was to be addressed by employees on the company jet, and the way these employees members ought to gown.
Jeffries additionally exhibited an autocratic streak as a frontrunner, and disdain for folks he thought beneath him: He infamously mentioned Abercrombie & Fitch was just for “cool” folks. That top-down administration method labored properly…till it didn’t.
By the 2010s, his my-way-or-the-highway method meant the corporate was lacking vital cultural shifts and falling out of step with its customers, who have been changing into much less all for firm logos and airs of exclusivity. And by late 2014, Jeffries was out after 11 straight quarters of declining same-store gross sales and immeasurable harm to the model.
As Abercrombie scrambled to reorganize itself after Jeffries’s exit, the corporate was run for greater than two years by an “workplace of the chairman” consisting of prime executives, together with Fran Horowitz, who went on to change into CEO of the corporate in 2017. Horowitz was tasked with main shell-shocked and demoralized employees. She additionally went in regards to the difficult work of extra clearly delineating the Abercrombie and Hollister manufacturers, which had change into virtually interchangeable by the tip of Jeffries’s reign.
Horowitz has constructed a formidable e-commerce enterprise, which now makes up 50% of firm gross sales. And by 2022, after years in retail purgatory, Abercrombie & Fitch revenues lastly rebounded to 2014 ranges. Its shares have risen sixfold up to now decade, and final 12 months annual income zeroed in on $5 billion.
Gross sales have been up 21% final quarter. Abercrombie & Fitch’s comeback story is simple and nonetheless going sturdy—no due to all of the drama and issues Jeffries induced.
