Abercrombie & Fitch

From Wikipedia, the free encyclopedia

Abercrombie & Fitch Co.

Abercrombie & Fitch logo.svg

Type

Public

Traded as

NYSE: ANF (Class A)

S&P 600 component

Industry

Retail

Founded

June 4, 1892; 130 years ago

Manhattan, New York City, New York, U.S.

Founders

David T. Abercrombie

Ezra Fitch

Headquarters

New Albany, Ohio

,

U.S.

Number of locations

854 (Feb. 2020)[1]

Area served

Worldwide

Key people

Terry Burman

(Non-Executive Chairman)

Fran Horowitz

(CEO)

Products

- Apparel

- accessories

- personal care

- footwear

Revenue

Increase US$3.71 billion (2021)

Operating income

Increase US$355.18 million (2021)

Net income

Increase US$263.01 million (2021)

Total assets

Decrease US$2.93 billion (2021)

Number of employees

44,000 (Feb. 2020)[1]

Divisions

Abercrombie & Fitch

Abercrombie Kids

Hollister Co.

Gilly Hicks

Website

abercrombie

Abercrombie & Fitch (A&F) is an American lifestyle retailer that focuses on casual wear. Its headquarters are in New Albany, Ohio. The company operates three other offshoot brands: Abercrombie Kids, Hollister Co., and Gilly Hicks.[2] As of February 2020, the company operated 854 stores across all brands.[1][2]

Once known for its sexualized ad campaigns, the company has toned down its imagery and no longer displays nearly nude models in their advertisements. According to then-Chairman Arthur Martinez, these changes were implemented to show that the company is evolving along with its consumers.[3] It is now targeting an older consumer, from ages 21 and up.[4]

Abercrombie & Fitch is notable for using "brand representatives" (previously called "models") for store customer service.[5]

Contents

- 1History

- 1.12007–present

- 1.1.1Market value

- 1.2Headquarters

- 2Marketing, advertising and brand identity

- 2.1Store staff

- 2.2Products

- 2.2.1Product criticism

- 2.3Brand protection

- 2.4Jeffries' 2006 target demographic quote

- 3Stores

- 3.1International expansion

- 3.1.1Remembrance poppy prohibition in the UK

- 3.2Abercrombie Kids shop on Savile Row

- 3.3Abercrombie opens college campus stores

- 4Brands

- 5Legal issues

- 5.1Employment practices

- 5.2Customer issues

- 5.3Lawsuits against other parties

- 6Privacy concerns

- 7See also

- 8References

- 9Further reading

- 10External links

History[edit]

Main article: History of Abercrombie & Fitch

Cover of A&F catalog from 1909

The Marquess of Camarasa wearing Abercrombie & Fitch hunting equipment in the Arctic Circle, 1921

The original Abercrombie & Fitch was founded in 1892 in New York City, New York, by David T. Abercrombie as an outfitter for the elite outdoorsman. Ezra Fitch—a wealthy lawyer and real estate developer, and devoted customer of the Abercrombie Company—bought a significant interest in the business in 1900.[6] In 1904, it was incorporated and renamed "Abercrombie & Fitch Co." Fitch eventually bought Abercrombie's share of the business becoming the sole owner from 1907 to 1928.[6] The company was an elite outfitter of sporting and excursion goods, particularly noted for its expensive shotguns, fishing rods, fishing boats, and tents[6] At one time it had outfitted Theodore Roosevelt's safari and Adm. Richard E. Byrd's expedition to Antarctica. Ernest Hemingway was also a regular customer; the gun with which Hemingway committed suicide in 1961 was purchased from Abercrombie and Fitch.[7] Following Hemingway's death, his wife placed several of his guns on consignment with the company.[8]

By the 1970s, the business was struggling with lower priced competition while trying to maintain its image. It was known for holding an extensive inventory of lavish items but operating expenses forced them to shed the most expensive items, such as an $18,000 (equivalent to $125,599 in 2021) gold and onyx chess set. Cash flow problems forced them to also cut inventory on moderate priced items.[9]

In 1976, it filed for Chapter 11 bankruptcy, finally closing its flagship store at Madison Avenue and East 45th Street in 1977.[10]

Shortly thereafter the name was revived in 1978; Oshman's Sporting Goods, a Houston-based chain owned by Jake Oshman,[11] bought the defunct firm's name and mailing list for $1.5 million[12] (equivalent to $6 million in 2021).[13] Oshman's relaunched the company as a mail-order retailer specializing in hunting wear and novelty items. It also opened shops in Beverly Hills, Dallas, and (by the mid-1980s) New York City.

Finally, in 1988, Oshman's sold the company name and operations to The Limited, a clothing-chain operator based in Columbus, Ohio. It gradually shifted its focus to young adults, first as a subsidiary of Limited Brands and then as a separate, publicly traded company;[14] and grew to become one of the largest apparel firms in the United States.[15]

Since 1997, the company has kept a high profile due to its advertising, its philanthropy, and its involvement in legal conflicts over branding; clothing style and employment practices. In the first decade of the 21st century, the Great Recession battered the company's business as teenagers looked to lower-priced fast fashion brands like H&M and Forever 21 for fashion.

After Mike Jeffries took over as CEO of the company in the 1990s, he focused the brand on becoming a teen retailer.[16] In 1998, the company expanded by launching their kids' line under the name Abercrombie Kids. Abercrombie Kids was built off the success of A&F and focused on the ages between 7 and 14. By 1999 the company gained more popularity than it had before. In 2000 was the launch of Hollister Co. "a new concept focused on the optimistic, laidback California lifestyle".[17]

2007–present[edit]

The company's stock price dropped from an all-time high of $84.23 in October 2007 to a low of $14.64 in November 2008.[18] The company worked to overhaul its merchandise mix and cut underperforming stores,[19] but lackluster performance has continued. Longtime CEO Michael Jeffries stepped down in December 2014, after 22 years with the company.[20] Fran Horowitz took over as CEO in February 2017.[21]

Abercrombie & Fitch store in New York City

To combat heavy competition from fast-fashion retailers like Forever 21 and H&M, the company announced key changes to its image. It stated that it aimed to reduce emphasis on sexualized advertising and focus more on customer service and diversity. Among the changes announced were eliminating sexualized advertising, no longer having shirtless models at new store openings, and eliminating sexualized pictures and advertising on bags, gift cards, and in stores. They changed the name of store employees from "models" to "brand representatives", and decided to allow a more individualistic dress code. Additionally, they declared that "brand representatives" would focus more on customer service by offering to help serve customers, as opposed to past policies of aloofness. They also aimed to promote more diversity among store employees and executives. In 2015 the company signaled that it would be implementing changes quickly.[5]

As of May 2015, the changes were apparent in stores. All "permanent marketing" images at the cash wrap and fitting rooms were removed and store models were no longer dressed in Abercrombie clothes.[5]

According to recent reports from Q1 2021, it was the "group’s best second-quarter operating income and margin since 2008, with sales exceeding pre-pandemic levels."[22]

In April 2022, Netflix released a documentary entitled, White Hot: The Rise & Fall of Abercrombie & Fitch directed by Alison Klayman. The documentary explores the reign of Abercrombie & Fitch in the late 1990s and early 2000s, discussing past transgressions and exclusive practices.[23]

Market value[edit]

In April 2017, the company was described by Standard & Poor's as having a market value of $650 million and about $420 million cash on hand. In May 2017, the company was in talks to sell itself. Potential buyers included Express, American Eagle Outfitters and Cerberus Capital Management. Negotiations failed by early July. As a result of the news, on 10 July the firm's stock fell 21%.[24]

Headquarters[edit]

The company's headquarters, referred to by the company as "The Home Office", is located outside of Columbus in New Albany, Ohio.[25] The Home Office is designed as a campus, and is referred to as such. The campus sits on 350-acres and consists of 11 two-story buildings, some of which are connected via skybridges. The company's two merchandise distribution centers (1 million square feet each) are located on campus to help ensure brand protection.[25] Also on campus are mock-up stores, one for each of the company's brands, where store layout, merchandise and atmosphere are determined.[25] In January 2017, the company announced they would be cutting 150 jobs at their corporate headquarters.[26]

The company also has a European office in Mendrisio, Switzerland.[27]

Marketing, advertising and brand identity[edit]

The trademark slogan, Casual Luxury

A&F was once known for its racy marketing photography by Bruce Weber.[28] It was black and white and set outdoors, usually with partially nude males and females for an increased tone of sexuality. The company promotes its casting sessions, models, and photo shoots in the "A&F Casting" feature on its website. The website also provides a gallery of current photography. Framed copies at company stores will sometimes name the model and store.

The company's brand image is heavily promoted as an international near-luxury lifestyle concept.[29] The company began cultivating an upscale image after the 2005 opening of its Fifth Avenue flagship store alongside Prada and other upscale retailers.[30] Having for years used high-grade materials in the manufacture of its merchandise, and pricing them at "near-luxury" levels, the company introduced the trademark Casual Luxury[30] as a fictional dictionary term with multiple definitions such as "[using] the finest cashmere, pima cottons, and highest quality leather to create the ultimate in casual, body conscious clothing,"[31] and "implementing and/or incorporating time honored machinery ...to produce the most exclusive denim..."[31] This upscale image has allowed it to open stores in international high-end locations and further promote the image by pricing its merchandise at almost double the American prices.

Overall, CEO Jeffries calls the company's image a "movie" because of the "fantasy" that plays out instore.[32]

Following a dismal earnings announcement in August 2014,[33] the company decided to drop its logo-branded apparel line, arguing that this element of its brand does not resonate with its target market. The company is now shifting its marketing strategy to trendier outfits and faster production processes. Some experts argue the retailer's focus on exclusivity has caused it to fall out of fashion with its target market.[34]

In 2018, Abercrombie shifted its target market to an older demographic of shoppers between ages 21–24.[35] Since 2018, Abercrombie has closed many of its larger flagship locations and shifted to opening stores with a focus on smaller, brighter spaces to keep customers interested amid the rise of e-commerce outlets.[36][37]

Store staff[edit]

Abercrombie & Fitch models

The company is noted for its use of "brand representatives" (previously called "models") for store customer service.[5] The models were required to buy and wear its clothing, but following a company settlement with California state labor regulators may now wear any no-logo clothing as long as it corresponds with the season and style of the brand. The California settlement also provided $2.2 million to reimburse former employees for their forced purchases of company-branded clothing.[38] An "Impact Team" was created in 2004 to control merchandise within each store and maintain company standards. Bigger and higher volume stores have a "Full Time Stock" who trains Impact associates, processes shipment, maintains stock room standards, and can act as a manager if the store is short on management staffing. The store manager and assistant managers are responsible for forms, lighting, photo marketing, fragrance presentations and to ensure models comply with the "look policy".[39]

Products[edit]

High-end "Ezra Fitch" clothing marker

Women's Wear Daily calls the company's clothing classically "neo-preppy", with an "edgy tone and imagery".[40] The company's fashions have a reputation for luxury, with the majority of designs trend-driven. There is heavy promotion of "Premium Jeans". In early 2010, the company introduced a leather handbag collection inspired by designs from Ruehl.

Its prices are recognized as the highest in the youth-clothing industry.[41] Internationally, prices are almost double those in its American stores. Retail analyst Chris Boring warns that the company's brands are a "little more susceptible" should recession hit, because their specialties are premium-priced goods rather than necessities.[42] Indeed, as the late-2000s recession continued, the company noticeably suffered financially for its refusal to lower prices or offer discounts. It argued that doing so would "cheapen" its near-luxury image. Analyst Bruce Watson warned that the company risked finding itself transformed into "a cautionary tale of a store that was left by the wayside when it declined to change with the times".[41] The company's year-to-year revenue, a key indicator of a retailer's health, rose 13% in September 2010, aided by strong international sales.[43]

The company has carried men's fragrances Fierce, Colden, and has re-branded the original cologne Woods (Christmas Floorset 2010). Women's fragrances have included 8, Perfume 41, Wakely, and Perfume #1. Fierce and 8 are the most heavily marketed fragrances, as they are the signature scents of the brand overall.[44]

Product criticism[edit]

In 2002, the company sold a shirt that featured the slogan "Wong Brothers Laundry Service – Two Wongs Can Make It White" with smiling figures in conical Asian hats, a depiction of early Chinese immigrants. The company discontinued the designs and apologized after a boycott started by an Asian American student group at Stanford University.[45] That same year, Abercrombie Kids removed a line of thong underwear sold for girls in pre-teen children's sizes after parents mounted nationwide storefront protests. The underwear included phrases like "Eye Candy" and "Wink Wink" printed on the front.[46]

More T-shirt controversies occurred in 2004. The first incident involved a shirt featuring the phrase, "It's All Relative in West Virginia," a jab at alleged incestuous relationships in rural America. West Virginia Governor Bob Wise spoke out against the company for depicting "an unfounded, negative stereotype of West Virginia", but the shirts were not removed.[47] Later, another T-shirt that said "L is for Loser" next to a picture of a male gymnast on the rings gathered publicity. The company stopped selling the shirt in October 2004 after USA Gymnastics president Bob Colarossi announced a boycott of A&F for mocking the sport.[48]

In 2005, the Women and Girls Foundation of Southwest Pennsylvania launched a "Girlcott" of the store to protest the sale of T-shirts displaying messages such as "Who needs brains when you have these?", "Available for parties," and "I had a nightmare I was a brunette." The campaign received national coverage on The Today Show, and the company pulled the shirts from stores on November 5, 2005.[49] Five days after this media coverage, the company pulled two of the shirts from its shelves, released an apology to girls for producing the T-shirts, and agreed to have corporate executives meet with the "Girlcott" girls at the company's headquarters.[50]

Bob Jones University, a non-denominational Protestant university located in Greenville, South Carolina, and its affiliated pre-collegiate schools, along with other Christian schools, have prohibited A&F and Hollister clothing from being "worn, carried, or displayed" on its campuses because of "an unusual degree of antagonism to the name of Christ and an unusual display of wickedness" in the company's promotions.[51]

After the company raised its prices in 2004, its products have been described as overpriced.[52]

A T-shirt controversy arose again over the company's Back-to-School 2009 collection of "humor tees".[53] One shirt proclaims "Show the twins" above a picture of a young woman with her blouse open to two men. Two other shirts state "Female streaking encouraged" and "Female Students Wanted for Sexual Research".[53] The American Family Association disapproved of the influence of the "sex-as-recreation" lifestyle shirts, and asked the brand to remove its "sexualized shirts" from display.[53]

Brand protection[edit]

Because of extensive counterfeiting of its products, the company launched a brand protection program in 2006 to combat the problem worldwide (focusing more on China, Hong Kong, Japan and Korea) by working with law enforcement globally.[54] The program is headed by a former FBI Supervisory Special Agent who was part of the FBI's Intellectual Property Rights program, and covers all the company's brands. The company says that the program "will improve current practices and strategies by focusing on eliminating the supply of illicit Abercrombie & Fitch products."[54]

In August 2011, the company offered Mike "The Situation" Sorrentino and other cast members of the MTV reality show Jersey Shore a "substantial payment" if they stopped wearing Abercrombie-branded clothes, stating "We are deeply concerned that Mr. Sorrentino's association with our brand could cause significant damage to our image."[55] In November 2011, Sorrentino filed a lawsuit against the company after it allegedly violated his copyrights in making shirts that said "The Fitchuation" and "GTL...You Know The Deal".[56] The case was dismissed in July 2013.[57]

Jeffries' 2006 target demographic quote[edit]

In 2013, a 2006 Salon interview with the CEO Mike Jeffries went viral and caused widespread outcry over the company's marketing practices.[58][59][60] The comments made by Mike Jeffries, stating that his brand is only suitable for "the good-looking, cool kids," and that there are people who do not belong in his clothes – namely overweight people, came under fire.[61][62]

That's why we hire good-looking people in our stores. Because good-looking people attract other good-looking people, and we want to market to cool, good-looking people. We don't market to anyone other than that. ... In every school there are the cool and popular kids, and then there are the not-so-cool kids. Candidly, we go after the cool kids. We go after the attractive all-American kid with a great attitude and a lot of friends. A lot of people don't belong [in our clothes], and they can't belong. Are we exclusionary? Absolutely.[63]

These quotes, which were the basis for the article's "youth, sex and casual superiority" headline, went largely unnoticed when the article was published in 2006, until they resurfaced in May 2013 after Kirstie Alley brought them up in an Entertainment Tonight interview[64] and the then prominent talk-show host Ellen DeGeneres spoke out against the company.[65][66]

Jeffries issued an official statement on May 17, 2013, regarding the news articles, saying, "I want to address some of my comments that have been circulating from a 2006 interview. While I believe this seven-year-old, resurrected quote has been taken out of context, I sincerely regret that my choice of words was interpreted in a manner that has caused offense." He also stated, "We are completely opposed to any discrimination, bullying, derogatory characterizations or other anti-social behavior based on race, gender, body type or other individual characteristics."[67]

Stores[edit]

Abercrombie & Fitch store formerly located at The Grove at Farmers Market in Los Angeles, California (closed February 21, 2015)

The Modern Canoe store located at The Mall at Millenia in Orlando, Florida with wooden louvers (featuring the Spring Break 2007 marketing campaign picture)

The exterior of the contemporary store design features white molding and formerly black louvers. From 2013 to 2014, the louvers were removed from all locations except flagship stores. The company stated that the louvers were removed in an effort to eliminate the exclusive atmosphere from stores and to experiment with window marketing.[68] The currently featured marketing image directly faces the entrance. The interior is lit with dim ceiling lights and spot lighting. Electronic dance music meant to create an upbeat atmosphere may be played at sound levels as high as 90 decibels, exceeding the corporate policy of 84 decibels and comparable to heavy construction machinery and harmful to the ears.[69]

The company operates 1,049 stores across all four brands. The company's brand has 278[70] locations in the United States, five in Canada (two in Alberta, two in Ontario, and one in British Columbia). The company currently operates 25 full-line stores and four outlet stores across sixteen countries.

International expansion[edit]

The Abercrombie & Fitch flagship store in Ginza, Tokyo, Japan – the first one in Asia

The Abercrombie & Fitch store in Hong Kong

The company's brand is believed to have reached its maximum growth potential in the American market. International expansion began in 2005, with the long-term goal of opening flagships for A&F (and eventually all its brands), in high-profile locations worldwide "at a deliberate pace".[71][72] After initially opening at a deliberately slow pace, the company began to accelerate international expansion for its namesake and its Hollister Co. brand in 2012.[73][74]

The company's first non-U.S. stores opened in Toronto and Edmonton in 2005, and then expanded to other major cities in Canada. The company first entered the European market in 2007 with the opening of its flagship London store at 7 Burlington Gardens, Savile Row.[75] Since then, the company has opened stores in Milan, Copenhagen, Paris, Madrid, Brussels, Dublin (now closed) and other major cities in Europe, including six stores in Germany. The company opened its first Asian flagship store in Tokyo in 2009,[76] followed by Fukuoka, Singapore, Hong Kong and Seoul.[77] The company would primarily focus on the Chinese and Japanese markets where luxury consumption is high.[78] The company has also entered a franchise agreement with Grupo AXO to open retail stores in Mexico by 2015.[79] The company entered the Middle Eastern market in 2015 with the opening of its flagship store in Kuwait.[80] Since then the company has opened locations in Dubai and plans to expand deeper into the Middle East with stores in Saudi Arabia, Qatar, Bahrain, and Oman.[81]

Remembrance poppy prohibition in the UK[edit]

In November 2010, the Southampton, England, store prevented 18-year-old Harriet Phipps from wearing a remembrance poppy, which is worn as part of the Remembrance Day commemorations in the United Kingdom and Canada every November. The official reason for the refusal was reported to be that the poppy is not considered part of the corporate approved uniform, and is therefore prohibited.[82] The ban drew criticisms, and on November 8 the company posted on its Facebook page the following statement: "As an American company that has been around since 1892, we appreciate the sacrifices of the British and American servicemen/women in the World Wars and in military conflicts that continue today. Our company policy is to allow associates to wear a poppy as a token of this appreciation on Remembrance Day. Going forward, ...we will revisit this policy to the days/weeks leading up to Remembrance Day."

Abercrombie Kids shop on Savile Row[edit]

In 2012, the company announced plans that it would open its Abercrombie Kids shop at No. 3 on Savile Row, next door to Gieves & Hawkes.[83] The plans drew criticism and opposition from the tailors of the Row, who were already unhappy about the presence of its main store on Burlington Gardens at the end of the Row to begin with, which eventually led to a protest organized by The Chap magazine on April 23, 2012.[84][85] During the consultation period, objections were lodged to Westminster City Council and in February 2013 the Council rejected many of the company's proposals for the store, and branded the entire plans "utterly unacceptable."[86][87] A&F appealed, managed to overcome the obstacles and opened the store in September 2014.[88] The following year, the company was subject to nearly £16,000 in fines and legal costs when it was ruled that changes it had made to the Grade II-listed building were illegal.[89]

Abercrombie opens college campus stores[edit]

In an attempt to more effectively reach the brand's ideal "college-age" customer, the company opened two campus stores in August 2018, both of which have since closed.[90]

Brands[edit]

The company has operated four concept brands apart from its namesake over the years; they have been referred to as subsidiaries, but operate as divisions under the company's umbrella.

Abercrombie Kids

Prep-school by Abercrombie & Fitch[91] Themed as "classic cool" for kids 7 through 14,[2] this is the children's version of Abercrombie & Fitch.

Hollister Co.

Southern California by Abercrombie & Fitch[91] Themed after "SoCal" for teenagers 14 through 18,[2] with significantly lower prices than its parent brand.

Gilly Hicks

The cheeky cousin of Abercrombie & Fitch[91] Themed after "Down Under" Sydney, offers underwear, loungewear and activewear for women 18 and up.[92] Currently sold primarily within Hollister Co. stores and e-commerce channels with a small number of individual store locations.

Ruehl No.925

Post-Grad by Abercrombie & Fitch[91] Themed after a fictional Greenwich Village heritage, offered clothes for 22 through 35 post-grads. Closed in 2010.[93]

Social Tourist

“Social Tourist is the creative vision of Hollister, the teen brand liberating the spirit of an endless summer, and social media personalities Charli and Dixie D’Amelio. The lifestyle brand creates trend forward apparel that allows teens to experiment with their style, while exploring the duality of who they are both on social media and in real life.“

Legal issues[edit]

The company has been involved in legal conflicts over its employment practices, treatment of customers, and clothing styles.

Employment practices[edit]

See also: Employment Practices Liability

In a 2004 lawsuit González v. Abercrombie & Fitch, the company was accused of discriminating against African Americans, Latinos, Asian Americans, and women by preferentially offering floor sales positions (called Brand Representatives or Models) and store management positions to Caucasian males.[94] The company agreed to a settlement of the class-action suit, which required the company to (1) pay $40 million to African Americans, Latinos, Asian Americans, and women who applied and were not hired or worked in certain store positions, (2) revise its hiring, performance measurement, and promotion policies, (3) revise its internal complaint procedures, (4) appoint a Vice President of Diversity, (5) hire 25 recruiters to seek out minority applicants, (6) discontinue the practice of recruiting employees at primarily white fraternities and sororities, (7) include more minorities in marketing materials, (8) report to a neutral court-appointed monitor twice per year regarding its progress in those areas, and (9) report to the court once per year.[95][96][97]

In June 2009, British law student Riam Dean, who had worked at the company's flagship store in London's Savile Row, took the company to an employment tribunal. Dean, who was born without a left forearm, claimed that although she was initially given special permission to wear clothing that covered her prosthetic limb, she was soon told that her appearance breached the company's "Look Policy" and sent to work in the stock room, out of sight of customers. Dean sued the company for disability discrimination, and sought up to £20,000 in damages.[98] In August 2009, the tribunal ruled the 22-year-old was wrongfully dismissed and unlawfully harassed. She was awarded £8,013 for loss of earnings and wrongful dismissal.[99][100]

In a lawsuit filed in September 2009, Equal Employment Opportunity Commission v. Abercrombie & Fitch Stores,[101] in U.S. District Court by the U.S. Equal Employment Opportunity Commission, 17-year-old Samantha Elauf said she applied, in June 2008, for a sales position at the Abercrombie Kids store in the Woodland Hills Mall, located in Tulsa, Oklahoma. The teenager, who wears a hijab in accordance with her religious beliefs, claims the manager told her the headscarf violates the store's "Look Policy".[102] The United States Supreme Court agreed to hear the case on February 25, 2015,[103] and ruled 8–1 on June 1, 2015, against the company.[104]

In 2010, a Muslim woman working at a Hollister store in San Mateo, California, was fired. Before being dismissed, Hani Khan had refused Abercrombie & Fitch's human-resources representative's demand that she remove her hijab. The representative reportedly stated that the headscarf, which Khan wears for religious reasons, violated the company's "Look Policy". The Council on American-Islamic Relations has stated that the dismissal is a violation of nondiscrimination laws, and filed a complaint with the U.S. Equal Employment Opportunity Commission.[105]

In 2011, the Belgian Centre for Equal Opportunities and Opposition to Racism started an investigation into the company's hiring and remuneration policies. The firm was suspected of only hiring personnel under 25 years old, making heavy demands on the physical appearance of its staff and rewarding a premium to male models that work shirtless.[106]

In November 2009, the company was added to the "Sweatshop Hall of Shame 2010" by the worker advocacy group International Labor Rights Forum.[107]

Customer issues[edit]

In 2009, the company was fined more than $115,000 by the Minnesota Department of Human Rights for refusing to let a teenage girl help her sister, who has autism, try on clothes in a fitting room. The amount of the fine reflected "pushback" by the company according to Michael K. Browne, the legal affairs manager of the Minnesota Department of Human Rights.[108]

A 16-year-old sued the company after discovering that she was being videotaped in a changing room by an employee, Kenneth Applegate II. Applegate denied the claim, but co-workers discovered his camera days later with the video on it.[109]

In 2010, a customer filed a class action relating to a 2009 holiday gift card promotion. The lawsuit alleges that the gift cards said "No Expiration Date" but Abercrombie voided and expired the gift cards in early 2010. In 2012, a judge certified a nationwide class in the case. In May 2013, Class Notice went out to potential class members.[110]

Lawsuits against other parties[edit]

In 2002, the company filed a lawsuit against American Eagle Outfitters, claiming that American Eagle copied the company's garment designs, among other things. The lawsuit was based on a trade-dress claim, stating that American Eagle had very closely mimicked the company's products' visual appearance and packaging. Specifically, it claimed that American Eagle copied particular articles of clothing, in-store displays and advertisements, and even its product catalog. Despite the admission that American Eagle might have utilized very similar materials, designs, in-store displays, symbols, color combinations, and patterns as A&F, the court ruled that there was not an excessive level of similarity to confuse potential customers, and therefore the court ruled in favor of American Eagle.[111]

On October 18, 1999, the company had a lawsuit about making false and misleading statements concerning its growth while knowing the actual growth was less than Wall Street expectations,[112] and paid $6,050,000 for settlement.

Privacy concerns[edit]

In February 2019, TechCrunch reported that the Abercrombie & Fitch mobile app in the iOS App Store was using session-replay functionality to record users' activities and send the data to Israeli firm Glassbox without the users' informed consent, compromising users' privacy and contravening the rules of the iOS App Store.[113][114]

See also[edit]

- Companies listed on the New York Stock Exchange (A)

- List of S&P 600 companies

- Lifestyle brand

Jump to search

Jump to navigation

Les Wexner

From Wikipedia, the free encyclopedia

Les Wexner

Leslie Wexner receives woodrow wilson award (cropped).JPG

Wexner in 2004

Born

Leslie Herbert Wexner

September 8, 1937 (age 84)

Dayton, Ohio, U.S.

Other names

"The Merlin of the Mall"

Alma mater

Ohio State University 1959

Occupation

Businessman

Known for

Chairman emeritus, L Brands;

expansion of Victoria's Secret;

association with Jeffrey Epstein

Political party

Republican (before 2018)[1]

Independent (since 2018)[2]

Spouse(s)

Abigail S. Koppel

( 1993)

Children

4

Leslie Herbert Wexner[4] (born September 8, 1937) is an American billionaire businessman, the founder and chairman emeritus of Bath & Body Works, Inc. (formerly Limited Brands).[5] Wexner grew a business empire after starting The Limited, a clothing retailer with a restricted selection of profitable items, and later expanded his holdings to include Victoria's Secret, Abercrombie & Fitch, Express, Inc., and Bath & Body Works. Wexner announced, in February 2020, that he was transitioning from CEO of L Brands into the role of chairman emeritus.[5] Wexner had a very close relationship with Jeffrey Epstein that began in the 1980s and continued until Epstein's death. Wexner was once the “main client” of Epstein’s money-management firm, according to Bloomberg. Wexner allowed Jeffrey Epstein to run his business out of a house he owned and resided in whilst CEO of Victoria's Secret.[6][7]

Contents

- 1Early life and education

- 2Career

- 2.1Jeffrey Epstein association

- 3Philanthropy

- 4Personal life

- 5Political activities

- 6See also

- 7References

- 8External links

Early life and education[edit]

Leslie Wexner was born in Dayton, Ohio[8] on September 8, 1937, to parents Bella (née Cabakoff 1908–2001)[9] and Harry Louis Wexner (1899–1975).[10][11] His parents were both of Russian-Jewish origin.[5] His father was born in Russia.[5] His mother, a first generation American, was born in the Williamsburg neighborhood of Brooklyn and moved to Columbus, Ohio, as a toddler.[10] He has a younger sister, Susan.[10][12] His parents paid tuition for Wexner to attend Bexley High School.[12] He attended Ohio State University, and although he had expressed an interest in architecture[13] he graduated in 1959[14] with a major in business administration.[8] While at Ohio State University, he became a member of Sigma Alpha Mu fraternity. Wexner served in the Air National Guard.[5] He briefly attended the Moritz College of Law.[12]

Career[edit]

Wexner began his retail career working in his parents' clothing store "Leslie's", which had been named in his honor.[13] After he decided to leave law school, his parents asked him to take care of the store when they went on their first vacation in ten years.[13] While they were away on vacation he analyzed the profit and loss margins on the women's clothing they sold.[13] He found that although higher-priced clothing (e.g. jackets) had a higher margin per item, they sold less frequently than blouses and were therefore less profitable as a line. When he told his father this, his father was uninterested in changing his inventory.[15]

In 1963, Wexner was lent $5,000 from his aunt Ida which was then matched by a bank in order to start The Limited.[12][13] The store took its name due to its limited focus on moderately priced merchandise such as skirts, sweaters and shirts that turned over quickly and generated greater revenues.[15][12] Wexner opened the first store on August 10, 1963, in the Kingsdale Shopping Center in Upper Arlington, Ohio, a suburb of Columbus. One year later, Wexner's parents closed their store and joined their son in running The Limited.[citation needed] He opened the second Limited store in August 1964.[13] He took Limited Brands public in 1969, listed as LTD on the NYSE.[13]

A. Alfred Taubman reportedly served as a mentor for Wexner, starting in the mid 1960s, and the two partnered on many deals involving Taubman's shopping malls over the years.[12]

Wexner expanded the Limited considerably in the 1970s, having opened the 100th store in 1976.[12] He took on significant debt in 1978 to purchase the importer and manufacturer Mast Industries, which later was regarded to have provided him with essential business advantages over competitors.[12]

In the 1980s, Wexner doubled his retail holdings by purchasing a number of companies and became known as a major retail owner at malls in America.

In 1982, Wexner acquired the lingerie business Victoria's Secret. Started as an MBA project by Stanford graduate Roy Raymond, Victoria's Secret attracted Wexner's interest due to the unique, high quality merchandise and Victorian-era decor of the shop which featured red-velvet sofas.[13] Wexner described Raymond as "very guarded" stating, "When I met him, it was as if he met the devil."[13] Six months later, when Raymond was facing bankruptcy, he contacted Wexner and offered to sell Victoria's Secret.[13] Wexner bought the company for $1 million and by the 1990s it was worth an estimated $1 billion.[16] After Wexner assumed ownership, Victoria's Secret became widely known for marketing its items with the use of super models known as "angels" which were featured in an annual fashion show, overseen by Ed Razek.[16] By 2015, sales were in decline and 2018 proved to be the final year for the Victoria's Secret Fashion Show.[16]

Over the years, Wexner built a retailing and marketing conglomerate that included Victoria's Secret, Pink (Victoria's Secret for teens), Bath & Body Works, Henri Bendel, The White Barn Candle Company, and La Senza. Previous brands that were spun off include Lane Bryant, Abercrombie & Fitch, Lerner New York, The Limited Too (now Tween Brands, Inc.), Structure 9, Aura Science, The Limited (which closed its brick-and-mortar stores while retaining its online presence), and Express (which closed its Canadian stores and hundreds of its U.S.-based stores).

In 2012, CNN Money described Wexner as the longest serving CEO of a Fortune 500 company.[17] In February 2020, Wexner was described as the longest serving CEO of a Fortune 500 company with his 57 years at the helm of L Brands.[18] He was on Harvard Business Review’s Top 100 Best Performing CEOs, ranked #11 in 2015, and #34 in 2016.[19][20]

L Brands shareholders filed a complaint in the Court of Chancery of Delaware on January 14, 2021, stating that Wexner, among others, created an "entrenched culture of misogyny, bullying and harassment" and was aware of abuses being committed by Jeffrey Epstein, which breached his fiduciary duty to the company, causing devaluation of the brand. The complaint also names Wexner's wife, current chair Sarah E. Nash and former marketing officer Ed Razek, whose "widely known misconduct" was long allowed at the company.[21]

Jeffrey Epstein association[edit]

Wexner had a close relationship with Jeffrey Epstein that began in the 1980s and continued until at least 2007.[22][23] He was the primary billionaire client of Epstein, a financier who claimed to only work with clients with a net worth of one billion USD or greater. Epstein became Wexner's financial manager in 1987.[24] Wexner purchased the New York property, the Herbert N. Straus House, in 1989 and later transferred it to Epstein in the mid-1990s following his marriage to Abigail.[24] In July 1991, Wexner granted Epstein power of attorney[25] and also instated him as a trustee on the board of the Wexner Foundation.

The Herbert N. Straus House on the Upper East Side

Wexner has been accused of failing to take action when complaints were raised against Epstein, including after executives of L Brands reported (in the mid-1990s) that Epstein was abusing his power and connection to Wexner by posing as a recruiter of Victoria's Secret models.[25] The artist Maria Farmer contacted local and federal authorities about an assault she allegedly endured by Epstein and Ghislaine Maxwell while working as an artist-in-residence on Wexner's Ohio property in 1996. Within a year of Farmer's complaint, the actress Alicia Arden filed a police report in Los Angeles detailing that Epstein had misrepresented himself as a recruiter for Victoria's Secret prior to another alleged assault.[25]

In early 2006, Epstein was charged in Florida with "multiple counts of molestation and unlawful sexual activity with a minor."[25] The New York Times reported that it was 18 months after the charges were raised that Wexner cut his ties to Epstein.[25]

In August 2019, following Epstein's second incarceration and prior to his death, Wexner addressed the Wexner Foundation in writing, releasing a statement that his former financial advisor, Jeffrey Epstein, had “misappropriated vast sums of money” from him and from his family.[26] Wexner retained services of criminal defense attorney Mary Jo White of Debevoise & Plimpton.[27] Wexner faced additional public scrutiny in late 2019 (and again in early 2020) when a group of wrestlers who are survivors of the Ohio State University abuse scandal publicly called on state and federal officials to conduct further inquiry into Maria Farmer's allegations of sexual assault at the Wexner property.[28][29] The wrestlers called for accountability surrounding the Wexner family's involvement in Epstein's abuse and raised the issue of the continuing influence of Abigail and Leslie Wexner serving as the "biggest and best-known benefactors" of the university.[28][29]

Philanthropy[edit]

In 1989, Wexner and his mother Bella were the first to make a $1 million personal donation to the United Way. Both of their names were inscribed in marble, and are on display in the lobby of the United Way Headquarters in Alexandria, Virginia.[30]

Wexner was listed by Forbes in 2017, the wealthiest of seven billionaires from Ohio who made the list.[31] He was a major funder of the Wexner Center for the Arts at the Ohio State University, which is named in honor of his father.[32]

Wexner explained that because "growing up, my folks moved around a lot, and I never got a good Jewish education", he felt unprepared to take leadership roles in the Jewish community.[33] So, in 1985, he joined Rabbi Herbert A. Friedman to establish the Wexner Foundation's first core program, aimed "to educate Jewish communal leaders in the history, thought, traditions and contemporary challenges of the Jewish people."[33]

Wexner receives Woodrow Wilson award in 2004

In 1991, Wexner formed with billionaire Charles Bronfman the Study Group, which is more widely known as the Mega Group.[34] The group was a loosely organized club of some of the country's wealthiest and most influential businessmen who were concerned with Jewish issues. Max Fischer, Michael Steinhardt, Leonard Abramson, Edgar Bronfman, and Laurence Tisch were some of the members. The group would meet twice a year for two days of seminars related to the topic of philanthropy and Jewishness. In 1998, Steven Spielberg spoke about his personal religious journey, and later the group discussed Jewish summer camps.[35] The group, which Wexner co-chaired with Charles Bronfman, went on to inspire a number of philanthropic initiatives such as the Partnership for Excellence in Jewish Education, Birthright Israel, and the upgrading of national Hillel.[34]

Wexner served on the board of trustees of Ohio State University from 1988 to 1997. In December 2005, Wexner was appointed to his second term and was elected chairman in 2009. It was announced in June 2012 that Wexner's chairmanship was to end, eight years before his appointment would have ended.[36]

On May 11, 2004, Wexner received the Woodrow Wilson Award for Corporate Citizenship at a dinner in Columbus, Ohio. The award was presented by the Woodrow Wilson International Center for Scholars of the Smithsonian Institution in Washington, DC.

On February 16, 2011, Wexner pledged a donation of $100 million to Ohio State, which will be allocated to the university’s academic Medical Center and James Cancer Hospital and Solove Research Institute, with additional gifts to the Wexner Center for the Arts and other areas. This latest gift is the largest in the university’s history.[37]

Through the L Brands Foundation, Wexner and L Brands contributed $163.4 million to the Columbus Foundation.[38]

On February 10, 2012, Ohio State University Medical Center officially changed its name to the Wexner Medical Center at Ohio State University commemorating "Mr. Wexner's indelible, lifelong legacy of leadership at Ohio State", according to university president E. Gordon Gee, during over 30 years of "ardent support" of the institution.[39]

Personal life[edit]

On January 23, 1993, Wexner, then 55 years of age, married Abigail S. Koppel, 31, an attorney, in a ceremony at their home in New Albany, Ohio.[40] The couple have four children: Harry, Hannah, David, and Sarah.[41]

Formerly of the Bexley area of Columbus, Ohio, Wexner now lives in New Albany, a community northeast of that city. He owns a 30-room, $47 million, Georgian-inspired estate, on nearly 336 acres (1.4 km²), that was built in 1990. The estate was, for twenty years, the location of the Annual New Albany Classic Invitational Grand Prix & Family Day benefiting The Center for Family Safety and Healing. The Classic consistently drew the top professional show jumping riders because of its elaborate and well-maintained jumping course.[citation needed] In February 2018, Abigail Wexner announced the end of the event, citing the growing number of elite equestrian competitions.[42]

As a pun on his name and his former residence in Bexley, the village of New Albany was known (unofficially) for some time as Wexley. Today, this Georgian-themed village inspires comparison to eighteenth century developments by wealthy aristocrats in England.[citation needed]

Wexner has owned the mid-eighteenth century Grade II* listed Foxcote House in Warwickshire, England, since 1997.[43]

The Limitless (Palma de Mallorca, 2006)

At the time of its construction in 1997, Wexner's Limitless was the largest American-owned private yacht, measuring 315 feet and 8 inches (96.25 meters) long and 41 feet (12.50 meters) wide. Few authorized images exist, but photographs of the yacht's interior appear in an October 2016 retrospective of the career of the yacht's interior designer, François Catroux, written by David Netto and published by Rizzoli.[44] The Limitless is one of the largest privately owned yachts in use.[45]

President George W. Bush appointed Wexner to serve in the Honorary Delegation to accompany him to Jerusalem for the celebration of the 60th anniversary of the State of Israel in May 2008.[46][47]

Wexner was inducted as an honorary member into the 104th Class of Sphinx Senior Class Honorary at The Ohio State University on May 7, 2010.[48]

On February 10, 2012, The Ohio State University board of trustees voted to rename The Ohio State University Medical Center in honor of Wexner, in recognition of his leadership and service to the university and the medical center. Now the medical center is known as Wexner Medical Center at Ohio State University.[14]

Political activities[edit]

Wexner hosted a fundraiser in 2012 for Mitt Romney[49] and donated $250,000 to Restore Our Future, Romney's super PAC.[50] In 2015, Wexner donated $500,000 to the Right to Rise USA Super-Pac that supported the 2016 presidential campaign of Jeb Bush.[51]

The Columbus Dispatch reported on September 14, 2018, that Wexner had renounced his affiliation with the Republican Party due to changes in its nature. Wexner made his comment shortly after former President Obama gave a speech on the same Columbus Partnership panel that Wexner addressed.[52][53] He has been a political independent since 2018.

Jump to search

Jump to navigation

Mike Jeffries (CEO)

From Wikipedia, the free encyclopedia

hideThis article has multiple issues. Please help improve it or discuss these issues on the talk page. (Learn how and when to remove these template messages)

This article's lead section may not adequately summarize its contents. (April 2022)

This article needs additional citations for verification. (April 2022)

This article needs to be updated. (April 2022)

Mike Jeffries

Born

Michael Stanton Jeffries

July 15, 1944 (age 77)[citation needed]

Nationality

American

Alma mater

Claremont McKenna College

Columbia Business School

Occupation

Businessman

Known for

Former Chairman and CEO of Abercrombie & Fitch

Spouse(s)

Susan Hansen

Michael Stanton Jeffries (born July 15, 1944)[not verified in body] is an American businessman. He helped reestablish the clothing company Abercrombie & Fitch , and served as CEO until 2014.

Contents

- 1Early life

- 2Career

- 2.1Abercrombie & Fitch Co.

- 3Personal life

- 4Controversies

- 5Further reading

- 6References

- 7External links

Early life[edit]

Jeffries was born on July 15, 1944,[citation needed] the son of Mr. and Mrs. Donald R. Jeffries.[1][third-party source needed] Born in Oklahoma, he grew up in Los Angeles, California[citation needed] where his father owned Party Time, a chain of party supply stores.[1][third-party source needed]

After high school, Jeffries attended Claremont Men's College (now Claremont McKenna College) where he graduated in 1966 with a BA in Economics. He received an MBA from Columbia Business School in 1968 and also studied at the London School of Economics.[1][third-party source needed]

Career[edit]

Ambox current red Americas.svg

This section needs to be updated. Please help update this article to reflect recent events or newly available information. (April 2022)

In 1968, Jeffries joined the management training program at Abraham & Straus, a now-defunct New York City department store. During this time Jeffries worked along with Allen Questrom (of J.C. Penney) and Mickey Drexler (the previous CEO of Gap Inc., who now works at J. Crew).[2]

In 1984, Jeffries founded Alcott & Andrews, a brand targeted at career women. The brand was initially successful, but in 1989 it fell into bankruptcy due to overexpansion, and closed.[3][4] Afterward, Jeffries took a position at Paul Harris, a Midwest clothing chain.[5]

Abercrombie & Fitch Co.[edit]

Further information: Abercrombie & Fitch

The chain store design in the early 1990s

Jeffries was hired in 1992 by Les Wexner (CEO of LBrands, then named The Limited) to invigorate Abercrombie & Fitch.[6] The company, founded in 1892, had been purchased by Limited Brands in 1988 after bankruptcy. Jeffries is considered to have been the main creator of the new look for the company.[2]

It was rebuilt as an upscale apparel retailer for the collegiate, and by the mid-1990s, Abercrombie & Fitch had opened dozens of new stores.[2] By 1996, LBrands was no longer heavily involved with the company, and eventually left it under the management of Jeffries.[citation needed]

During this time, A&F has attracted controversy from different groups such as the feminist movement and the American Decency Association, and a number of lawsuits.[2] An outspoken businessman, Jeffries has been quoted making statements in the press that can be considered controversial.[7] Such comments include his assertion that "We hire good-looking people in our stores. Because good-looking people attract other good-looking people, and we want to market to cool, good-looking people. We don't market to anyone other than that."[7]

In 2004, he made approximately $25 million USD with a "stay bonus" of US$6 million, which dropped from $12 million after a controversy involving his "excessive compensation".[2] After surveying 2,000 US corporations, the Corporate Library named Jeffries as the "Highest Paid Worst Performer" of 2008, after he received a compensation package valued at $71.8 million.[8] Jeffries refused to lower prices or offer discounts at Abercrombie & Fitch stores during the retail recession until September 2009, after the company posted same store sales losses for 17 consecutive months.[9] Jeffries' employment agreement was set to expire December 31, 2008.[10][better source needed] On December 22, 2008, A&F corporate announced that it had been renewed.[10][better source needed] It expired on February 22, 2014.[10][better source needed]

After a slump in 2008 due to the financial crisis of 2007–2008, sales recovered in 2011.[11] His total compensation in 2011 was estimated at $46,609,075, most of this being in the form of stock options.[12][full citation needed]

As of 2012, Jeffries owned about 2.9% of the company's shares, making him difficult to remove without his consent. At that time, his recent contract called for a payout of over one hundred million dollars should he lose his job due to an ownership change.[13]

On December 9, 2013, it was reported Jeffries had agreed to a new contract with A&F that would tie his pay to company performance.[14][15] Also in December, market commentator Herb Greenberg named Jeffries the worst CEO of 2013. Greenberg pointed out that the share price for Abercrombie and Fitch had collapsed by 40% during the year.[16] This was after Jim Cramer of CNBC had earlier named Jeffries to his "Wall of Shame".[17]

Jeffries was once one of the best-paid CEOs in retail but he saw his compensation shrink 72 percent in 2013. His total pay was $2.24 million in the fiscal year of 2013, which ended February 1. That was down from $8.16 million in the previous year and $48.1 million before that.[18]

On December 9, 2014, Jeffries stepped down as A&F CEO amid mass criticism of the company's performance and 11 straight quarters of negative company comparable-store sales. The shares jumped 8 percent after the move was announced, marking the biggest one-day gain in more than nine months.[18][19]

Personal life[edit]

On April 3, 1971, in Miami, Florida, Jeffries married Susan Marie Isabel Hansen, daughter of Charles Henry Hansen, president and founder of Charles Hansen Music Publishing.[1][third-party source needed] They have one child.

As of 2013, Jeffries was reported to be living with his partner, Matthew Smith,[20] and three dogs,[13] following a separation from his wife.[who?][20][verification needed] Smith headed the Jeffries Family Office, an Ohio limited liability corporation that "advocates for the personal interests of Abercrombie's CEO." Smith also reviewed internal Abercrombie & Fitch documents and consulted on real estate matters.[13] His involvement with Abercrombie & Fitch was criticized in some quarters as an example of poor corporate governance, since he held no official position in the company.[20] Smith's presence was a factor in Jeffries being ousted as CEO of Abercrombie & Fitch in 2014.[11]

Controversies[edit]

In a 2006 interview with Salon, Jeffries stated that his clothing line was exclusively for "cool" people. Moreover, he has said he did not want overweight or unattractive people to wear his clothes.[21] The comments, which came to light in 2013, drew negative publicity and criticism for the company.[22] Jeffries issued a public apology on May 15, 2013, stating that "We are completely opposed to any discrimination, bullying, derogatory characterizations or other anti-social behavior based on race, gender, body type or other individual characteristics".[23]

In October 2012, Bloomberg News first reported on Jeffries' standards for his cabin crew on Abercrombie's Gulfstream G-V Jet, used by Jeffries, Smith and their dogs.[24] The male models who work as stewards aboard the company jet were required to wear Abercrombie-branded polos, jeans, boxer briefs and flip-flops as part of their uniform, as well as a "spritz" of cologne. This information then came to light as a result of a lawsuit that claimed Jeffries fired his own jet pilot in order to replace him with a much younger man.[13] The suit was quickly settled out of court when Jeffries was ordered to testify by the presiding judge.[25] Male house staff for Jeffries, paid for by the Jeffries Family Office, were provided by the same modeling firm that supplies male staff for the company jet.[13]

Further reading[edit]

- Berfield, Susan & Rupp, Lindsey (January 22, 2015). "The Aging of Abercrombie & Fitch-Behind the Decline of Abercrombie & Fitch and the Fall of its Mastermind, Michael Jeffries". Bloomberg Businessweek. Retrieved January 22, 2015.

Jump to search

Jump to navigation