Mike Jeffries, the former CEO of Abercrombie & Fitch Co., was arrested on Tuesday in Florida who is accused of sex trafficking and using his position at the top of the fashion retailer to force men to have sex in order to get a chance to model for the brand.
Accordingly the prosecutionJeffries, his partner Matthew Smith and an associate of theirs, James Jacobson, allegedly ran an international sex trafficking and prostitution ring from 2008 to 2015, a period that largely overlapped with Jeffries’ time as CEO from 1992 to 2014.
Jeffries was ousted from the company nearly a decade ago, but the latest allegations are reminiscent of sex scandals that plagued his tenure and a management style that nearly sank Abercrombie & Fitch.
Abercrombie’s history dates back to 1892, when the company specialized in clothing and bags for travelers and outdoor enthusiasts. But when Jeffries took the helm in 1992, he began transforming Abercrombie into the leading teen retailer of the 1990s and early 1990s through rebranding, logo-adorned clothing and a hypersexualized preppy ethos. The company released catalogs that some critics at the time said bordered on soft porn and placed half-naked, athletic young men at store entrances. Jeffries also had great success with the launch of surfer brand Hollister in 2000.
Eventually, some of Jeffries’s attention-grabbing behavior came to the surface. In the early 2010s, media coverage of his excesses included, among other things, the questionable use of company funds for travel, an important role played by his spouse in running the company, and a handbook with detailed instructions on how to be approached by employees on the company jet and how these employees should dress.
Jeffries also displayed an autocratic streak as a leader and, as he infamously said, despised people he considered beneath him Abercrombie & Fitch was only for “cool” people. This top-down management approach worked well…until it didn’t.
In the 2010s, its “my way or the highway” approach caused the company to miss important cultural shifts and fail to keep up with its consumers, who were less interested in corporate logos and the air of exclusivity. And by the end of 2014, Jeffries was out of business after 11 consecutive quarters of declining same-store sales and untold damage to the brand.
As Abercrombie sought to reorganize following Jeffries’ departure, the company was run for more than two years by an “office of the chairman” made up of top executives, including Fran Horowitz, who became the company’s CEO in 2017.
Horowitz was put in charge of leading the shocked and demoralized staff. She also set about the challenging task of more clearly distinguishing the Abercrombie and Hollister brands, which had become nearly interchangeable toward the end of Jeffries’ reign. Horowitz has built an impressive e-commerce business that now accounts for 50% of the company’s revenue. And by 2022, after years in retail purgatory, Abercrombie & Fitch Co.’s sales finally recovered to 2014 levels. Its shares have risen sixfold in the last decade, and annual sales for the last year are 5 billion US dollars.
More recently, Horowitz launched new initiatives such as an activewear line a few years ago and a wedding store this year. Meanwhile, A&F’s comeback story is still undeniably successful, with sales up 21% in its most recent quarter, thanks in no small part to all the drama and problems Jeffries caused.