Mike Jeffries’ troubled history with Abercrombie

Mike Jeffries, former CEO of Abercrombie, is the man behind that vision. And on Tuesday, he and associate Matthew Smith were arrested in Florida in connection charges related to sex traffickingunder a federation indictment. The duo, along with one of their employees, James Jacobson, are accused of running an international sex trafficking and prostitution ring from 2008 to 2015, allegedly involved in paying for the operation had secret sex with dozens of men, including 15 unnamed victims.

The official indictment has been a long time coming. Last year, BBC released a documentary about Jeffries’ shady activities. the BBC The investigation revealed that Jeffries and Smith allegedly used intermediaries to find men to attend and participate in sexual events. Jeffries and Smith allegedly engaged in sexual activity with approximately four men at these events or “instructed” them to have sex with each other, several event attendees said. BBC. According to the charges, Jeffries’ personal staff wore Abercrombie uniforms and supervised operations, and employees gave attendees envelopes containing thousands of dollars in cash at the end of the event.

The intermediary “made it clear that unless I let him perform oral sex on me, I would not meet with Abercrombie & Fitch or Mike Jeffries,” said David Bradberry, who was introduced to Jacobson in 2010 when he was only 23 years old, he said. BBC. An agent posing as a model recruiter introduced Bradberry to Jacobson, who identified himself as a janitor for the “owner” of Abercrombie and Fitch, according to the report. BBC investigation.

The federal indictment includes related charges and more.

Jeffries’ shady past with Abercrombie

According to one Interviewed in 2006 with Beauty salonJeffries wanted to turn the 130-year-old retailer into a popular teen clothing brand at the time, which he did successfully — but not without offending many. His interview pretty much sums up his marketing approach of only talking about “cool” people.

“Companies that are struggling are trying to target everyone: young, old, fat, thin. But then you become completely normal,” Jeffries said Beauty salon. “You don’t alienate anyone, but you don’t excite anyone either.”

By 2006, Abercrombie & Fitch’s earnings had increased for 52 consecutive quarters, with annual profits of more than $2 billion. Additionally, the company opened hundreds of new brick-and-mortar stores and launched three new brands, including Hollister.

“But the marketing approach that made A&F a financial success also made it a HR and PR nightmare,” according to NPR. Abercrombie’s marketing approach has sparked backlash women through fake advertising and boycott call from the American Molding Association. Black, Latino, and Asian American employees in 2004 filed a class action lawsuit against the company alleging minority applicants were discouraged from applying.

In the early 2010s, Abercrombie began to decline financially due to age discrimination and employment practices lawsuits, and Jeffries’ 2006 interview with Beauty salon began to circulate again and spread. In 2013, Jeffries was named the worst CEO of the year TheStreet’is Herb Greenberg. For starters, CNBC’s Jim Cramer named him his “Wall of Shame.”

“Since it first traded in 1996, Abercrombie has barely beaten the S&P 500,” Greenberg wrote in 2013. “It has lagged the index significantly over the past one-, three- and five-year marks.” ”. is an abomination, prompting activist firm Engaged Capital to demand his ouster.”

By 2014, same-store sales had declined for 11 consecutive quarters, and two of its sub-brands, Ruehl No. 925 and Gilly Hicks, closed just a few years after their launch. At that time, teenagers also loved Abercrombie’s style and the shopping mall era was coming to an end. And in 2016, Abercrombie was considered most hated retailer by the US Customer Satisfaction Index for its aggressive and controversial marketing.

Abercrombie’s second wind

But since Abercrombie has distanced itself from Jeffries, the brand is making a big splash return after posting the best first-quarter earnings in company history this year. Abercrombie reported net revenue of $1 billion, up 22% from 2023. Last year, the company’s annual revenue was $5 billion.

This is a grand return for the brand. CEO Fran Horowitz took the helm in 2017, revamping stores and inventory as well as expanding and introducing clothing to suit a variety of lifestyles.

“We have moved from fitting in to creating belonging,” Horowitz said in a 2022 address at the fifth annual American Innovation Conference at Fordham University’s Gabelli School of Business.