Career
Early career
In 1968, Jeffries joined the management training program at Abraham & Straus, a Brooklyn department store which was owned by the umbrella corporation Federated Department Stores, which was rebranded Macy's in 1994 after that property was acquired by Federated. He worked for 12 years at Abraham & Straus, before moving to Bullock's in Los Angeles, owned by Federated, as executive vice president for merchandising. He then worked for three years at Federated headquarters in Cincinnati, Ohio. [5]
In 1984, Jeffries founded Alcott & Andrews, a brand targeted at career women. [5] The store fell into bankruptcy in 1989 due to over-expansion and closed, [6] [7] with the New York Times noting that the store offered "too little variety in its merchandise." [8]
After the Alcott & Andrews bankruptcy in late 1989, Jeffries worked in merchandising at Paul Harris, a Midwest clothing chain that also went bankrupt, in early 1991. [9] [2] [8] [10]
Abercrombie & Fitch Co.
Jeffries ran the company from 1992 to 2014 as CEO and Chairman. During that period, he completely changed the brand, image and focus of the company, in a turnaround that proved extremely successful during the 1990s and early 2000s, albeit not without controversy. After a string of poor results from the financial crisis of 2007–2008 onwards, plus criticism related to the brand he created, he stepped down in 2014.
1990s
Jeffries was hired in 1992 by Les Wexner (CEO of LBrands, then named The Limited) to invigorate Abercrombie & Fitch. [11] The company, founded in 1892, had been purchased by Limited Brands in 1988 after bankruptcy.
Jeffries was the main architect of the company's new brand. [2] It was rebuilt as an upscale apparel retailer for the collegiate. He built the brand around "sexualized marketing", for example shirtless beefcake male models greeting patrons in stores, and likewise scantily-clad male models posing in sexually-suggestive positions in large advertisements and billboards. [12] Jeffries created a cult following among young buyers. [12] By the mid-1990s, Abercrombie & Fitch had opened dozens of new stores globally. [2] "Abercrombie led the pack of teen fashion brands in the 1990s largely as a result of the image created by Mr. Jeffries", according to the Wall Street Journal. [12]
2000s
An outspoken businessman, Jeffries made statements in the press that were controversial. [13] For example, he once said, "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." Jeffries noted that "those companies that are in trouble are trying to target everybody: young, old, fat, skinny. But then you become totally vanilla. You don't alienate anybody, but you don't excite anybody, either." [13]
This controversial "marketing approach that made A&F into a financial success also made it an HR and PR nightmare". [14] [12] A&F attracted controversy from different interest groups, such as the feminist movement and the American Decency Association, and a number of lawsuits ensued. [2] In 2003, Black, Latino and Asian American employees filed a class action lawsuit against the company claiming that minority applicants were discouraged from applying. [14] The American Decency Association called for a boycott of A&F. [14] A group of Pennsylvania high schoolers called for a "girlcott" of the brand. [14]
In 2004, Jeffries earned approximately US$25 million with a "stay bonus" of $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. [15] Jeffries refused to lower prices or offer discounts at Abercrombie & Fitch stores during the retail recession of the financial crisis of 2007–2008, until September 2009, after the company posted same store sales losses for 17 consecutive months. [16] Sales recovered in 2011. [17] His total compensation in 2011 was estimated at $46,609,075, most of this being in the form of stock options.[ citation needed ]As of 2012 [update] , 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 $100 million should he lose his job due to an ownership change. [18] 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. [19]
Jeffries business reputation sank in 2013, when TheStreet's Herb Greenberg named Jeffries the worst CEO of 2013. Greenberg pointed out that the share price for A&F had collapsed by 40% during the year. [20] This was after Jim Cramer of CNBC had earlier named Jeffries to his "Wall of Shame". [21]
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. [19] [22] On top of his standard pension, Mike Jeffries received lifetime bonus payments totaling about $1m a year. Following allegations of sex trafficking in late 2023, the company stopped making the bonus payments. [23]
In 2022, Jeffries' leadership of A&F was the subject of a Netflix documentary, White Hot: The Rise & Fall of Abercrombie & Fitch, which focused on Jeffries' transformation of A&F into an "avatar of exclusivity and soft-core sex appeal." The film's focus is the buildup to a 2003 class-action lawsuit against the company. [24]
