Mike Jeffries’ difficult history with Abercrombie

Mike Jeffries, the former CEO of Abercrombie, was behind this vision. And on Tuesday, he and his partner Matthew Smith were arrested in Florida in connection with Sex trafficking allegationsaccording to a federal statement Accusation. The duo, along with one of their associates, James Jacobson, are alleged to have run an international sex trafficking and prostitution ring from 2008 to 2015, allegedly paying for secret sex with potentially dozens of men, including 15 unnamed victims.

The official charges have been a long time coming. Last year, BBC released a documentary about Jeffries’ shady practices. The BBC The investigation revealed that Jeffries and Smith allegedly used an intermediary to find men to participate in the sex events. Multiple attendees at the events reported that Jeffries and Smith allegedly engaged in sexual activity with or “instructed” approximately four men to have sex with each other at these events BBC. According to the allegations, Jeffries’ personal staff, wearing Abercrombie uniforms, supervised the activity, and at the end of the events, staff gave participants envelopes full of thousands of dollars in cash.

The middleman “made it clear to me that if I didn’t let him perform oral sex on me, I wouldn’t meet with Abercrombie & Fitch or Mike Jeffries,” said David Bradberry, who met Jacobson in 2010, when he was 23 BBC. An agent posing as a model recruiter introduced Bradberry to Jacobson, who described himself as a gatekeeper to the “owners” of Abercrombie and Fitch, according to the newspaper BBC Investigation.

The federal indictment contained corresponding allegations and more.

Jeffries’ shady past with Abercrombie

According to a Interview 2006 with salonJeffries wanted to turn the 130-year-old retailer into the fashion brand for teenage clothing of the time, which he succeeded in doing – but not without arousing the displeasure of many people. His interview pretty much sums up his marketing approach, which is all about “cool” people.

“The companies that are in trouble try to target everyone: young, old, fat, thin. But then you go completely vanilla,” Jeffries said salon. “You don’t alienate anyone, but you don’t upset anyone either.”

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

“But the marketing approach that made A&F a financial success also made it an HR and PR nightmare.” accordingly NPR. Abercrombie’s marketing approach sparked a reaction women through bogus advertisements and a boycott Call from the American Decency Association. Black, Latino and Asian American employees in 2004 filed a class action lawsuit against the company on the grounds that minority applicants were discouraged from applying.

In the early 2010s, Abercrombie began a financial decline due to age discrimination and lawsuits over hiring practices, as well as Jeffries’ interview with Jeffries in 2006 salon was re-circulated and went viral. In 2013, Jeffries was named the worst CEO of the year by TheStreet’s Herb Greenberg. Additionally, CNBC’s Jim Cramer named him to his “Wall of Shame.”

“Since its early IPO in 1996, Abercrombie has barely beaten the S&P 500. “It has underperformed the index dramatically over the last one, three and five years,” Greenberg wrote in 2013. “Last year in particular was an abomination, prompting activist firm Engaged Capital to call for its ouster.”

By 2014, same-store sales fell for 11 consecutive quarters and two of its subsidiary brands, Ruehl No.925 and Gilly Hicks, closed just a few years after launch. By this time, teenagers were also embracing Abercrombie’s style and the mall era was coming to an end. And in 2016, Abercrombie became the most hated retailer recognized by the American Customer Satisfaction Index for its hypersexualized marketing and controversy.

Abercrombie’s second wind

But as Abercrombie has distanced itself from Jeffries, the brand is on the rise Come back after posting its best first quarter results in the company’s history this year. Abercrombie reported net sales of $1 billion, up 22% from 2023. Last year, annual sales were $5 billion.

This was an epic comeback for the brand. CEO Fran Horowitz took the helm in 2017, revamping stores and inventory, expanding sizes and introducing clothing for different lifestyles.

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