The CEO Of Abercrombie & Fitch Is At A Major Crossroads
When Jeffries became CEO in 1992, Abercrombie & Fitch had 36 stores that generated approximately $50 million in annual sales.
Jeffries saw an opportunity in teen retail, and today Abercrombie has grown to more than 1,000 stores, with annual sales surpassing $4.5 billion, according to its annual report.
The brand is now at a crossroads. Its heyday was during a resurgence in preppy fashion, and it's had a tough time figuring out how to embrace the new quirky, hipster style. Abercrombie has also struggled in Europe, where it was banking on major growth.
The company must decide: Does it evolve to chase its aging consumers, or start targeting new, younger ones?
"[Jeffries] grabbed those young consumers like crazy” in the 1990s, said Robin Lewis, co-author of "The New Rules of Retail" and CEO of newsletter The Robin Report. The company's clothing, geared towards "cool, sexy, young people," was quickly met with commercial success in that category.
"But what happens, when you define [your customer] so clearly and well, is your core consumer begins to get older,” Lewis said.
Lewis said that while it would be risky for Abercrombie to focus only its core consumers, the alternative would not necessarily put the company back on its previous financial track domestically.
"If [Jeffries] repositions the brand for the young kids coming up, they will say ‘that was from my younger brother, I don’t want anything to do with it,'" he said.
To complicate the situation, Jeffries' leadership has recently come under scrutiny during the brand's state of uncertainty. Jeffries' definition of beauty has infiltrated the company's image and philosophy, and has consumers thinking twice about wearing the brand.
In a 2006 Salon profile — the best journalistic depiction of the media-aloof Jeffries — Benoit Denizet-Lewis described the image-conscious CEO:
He wants desperately to look like his target customer (the casually flawless college kid), and in that pursuit he has aggressively transformed himself from a classically handsome man into a cartoonish physical specimen: dyed hair, perfectly white teeth, golden tan, bulging biceps, wrinkle-free face, and big, Angelina Jolie lips.
Denizet-Lewis also commented on the company's "young, painfully attractive..." employees , whom he observed during his two-day visit to its headquarters in New Albany, Ohio. Jeffries even admitted in the article that the company hires good-looking people to work in its 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."
The comments recently resurfaced in connection with the brand's refusal to stock plus-sized clothing for women, raising a firestorm.
Jeffries' workplace rules have also caused some to question his management style. BuzzFeed recently reported on a rigid set of "Workstation Standards" banning clutter from the company headquarters, and employees are not allowed to wear the color black, reportedly because Jeffries loathes the shade.
Abercrombie's direction and image must be managed carefully going forward. Lewis thinks Jeffries will continue to chase the younger, hip demographic, though he may have to make some changes to successfully do so.
“My opinion is that he probably will not go the direction of chasing after his aging original consumer," Lewis said. "He'll continue to try to keep the brand's positioning for young, sexy, cool, people in tact."
A representative for the retailer said, "We are continually evaluating opportunities and looking for the best ways to do business. We recently conducted a global research study on what our consumers think, and the data may lead us to make further changes throughout the business."