Millennials: You’ll remember visiting Abercrombie & Fitch in the late 1990s and early 2000s. Loud, groovy music, perfumes so strong you could barely think straight, and posters depicting half-naked men were all part of the experience – and the desire to feel “cool.”
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Mike Jeffries, former CEO of Abercrombie, was behind this vision. On Tuesday, he and his partner Matthew Smith were arrested in Florida in connection with sex trafficking charges, according to a federal office. Indictment. The duo, along with one of their employees, James Jacobson, allegedly ran an international sex trafficking and prostitution ring from 2008 to 2015 that allegedly included paying for clandestine sex with dozens of potential men, including 15 undisclosed victims. About their identity.
The formal indictment has been a long time coming. last year, BBC He released a documentary about Jefferies’ shady practices. the BBC The investigation revealed that Jeffries and Smith used a middleman to find men to attend and participate in the sexual events. Jeffries and Smith allegedly engaged in sexual activity with about four men at these events or “directed” them to have sex with each other, multiple attendees at the events said. BBC. Jefferies’ personal staff dressed as Abercrombie and supervised the activity, according to allegations, and employees presented attendees with envelopes filled with thousands of dollars in cash at the end of the events.
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David Bradbury, who met Jacobson in 2010 when he was 23, said the broker “made it clear that unless I allowed him to perform oral sex on me, I would never meet Abercrombie & Fitch or Mike Jeffries.” BBC. An agent posing as a model recruiter introduced Bradbury to Jacobson, who described himself as a gatekeeper to the “owners” of Abercrombie & Fitch, according to BBC investigation.
The federal indictment included related allegations and more.
Jefferies’ shady past with Abercrombie
According to A Interview 2006 with salonJeffries wanted to turn the 130-year-old retailer into the beloved teen clothing brand of the time, which he succeeded in doing — but not without offending large swaths of people. His interview pretty much sums up his marketing style as being only about “cool” people.
“Those companies that are having problems try to target everyone: young, old, fat, skinny. But then it becomes completely vanilla,” Jeffries said. salon. “You don’t alienate anyone, but you don’t excite anyone either.”
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By 2006, Abercrombie & Fitch’s profits had risen for 52 straight quarters, with annual profits exceeding $2 billion. In addition, the company opened hundreds of new stores and launched three new brands, including Hollister.
“But the marketing approach that made A&F a financial success also made it an HR and PR nightmare,” according to NPR. Abercrombie’s approach to marketing has sparked a response from Women through fake ads And boycott Appeal from the American Decency Association. Black, Latino, and Asian American employees in 2004 A class action lawsuit was filed Against the company claiming that minority applicants were discouraged from applying.
In early 2010, Abercrombie began to head south financially as a result of age discrimination and lawsuits over employment practices, and Jeffries’ 2006 interview with salon It began to circulate again and spread widely. In 2013, Jefferies was named Worst CEO of the Year The StreetHerb Greenberg. To boot, CNBC’s Jim Cramer called it a “wall of shame.”
“Since its early trading in 1996, Abercrombie has barely beaten the S&P 500,” Greenberg wrote in 2013. “It has significantly lagged the index over the past three and five years.” “Last year, in particular, he was so distasteful that activist firm Engaged Capital called for his ouster.”
By 2014, same-store sales had declined for 11 consecutive quarters, and two of its brands, Ruehl No.925 and Gilly Hicks, were shuttered just a few years after their launch. Teenagers had outgrown Abercrombie at that point, and the mall era was coming to an end. In 2016, Abercrombie was considered the leader Most hated retailer By the American Customer Satisfaction Index due to overly sexualized marketing and controversies.
Abercrombie’s second wind
But since Abercrombie has distanced itself from Jefferies, the brand is making a big comeback after posting its best first-quarter earnings in the company’s history this year. Abercrombie reported net sales of $1 billion, up 22% from 2023. Last year, its annual revenue was $5 billion.
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This was an epic comeback for the brand. CEO Fran Horowitz took the helm in 2017, revamping stores and inventories as well as expanding sizes and introducing apparel for a variety of lifestyles.
“We have moved from a place of fitting in to creating a place of belonging,” Horowitz said in a 2022 speech at Fordham University’s Gabelli School of Business’ fifth annual American Innovation Conference.
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