Mike Jeffries (CEO)

Michael Stanton Jeffries (born July 15, 1944) is an American businessman. He was chiefly responsible for reestablishing the clothing company Abercrombie & Fitch and developing its modern brand image, and was CEO until 2014.

Early life

Jeffries was born in 1944, the son of Shirley and Donald R. Jeffries (1918-1985). Born in Oklahoma, he grew up in Los Angeles, California where his father owned Party Time, a chain of party supply stores.^[1]

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] That same year 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 Millard S. 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.

Abercrombie & Fitch Co.

The chain store design in the early 1990s

Jeffries was hired by Leslie Wexner (CEO of LBrands, then named The Limited) to invigorate Abercrombie & Fitch. 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, saying that he wanted A&F to "sizzle with sex".^[2]

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

During this time, A&F has offended groups as diverse as the feminist movement and the American Decency Association, and has attracted a fair number of other controversies and lawsuits.^[2] An outspoken businessman, Jeffries has been quoted making statements in the press that are considered controversial.^[5] 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." ^[5]

In 2004, he made approximately $25 million USD with a "stay bonus" of $6 million USD, 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.^[6] 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.^[7]

Jeffries' employment agreement was set to expire December 31, 2008.^[8] On December 22, 2008, A&F corporate announced that it had been renewed.^[8] It expired on February 22, 2014.^[8]

His total compensation in 2011 was estimated at $46,609,075, most of this being in the form of stock options.^[9]

Jeffries owns about 2.8% of the company's shares making him difficult to remove without his consent. His most recent contract calls for a payout of over one hundred million dollars should he lose his job due to an ownership change.^[10]

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.^[11][12] 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.^[13] This was after Jim Cramer of CNBC had earlier named Jeffries to his "Wall of Shame". ^[14]

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.^[15]

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.^[15][16]

Personal life

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] They have one child, Andrew Hansen Jeffries.^[17]

Following a quiet separation from his wife,^[18] Jeffries lives with his partner Matthew Smith and three dogs.^[19] Smith heads the Jeffries Family Office, an Ohio limited liability corporation that "advocates for the personal interests of Abercrombie's CEO." Smith also reviews internal Abercrombie & Fitch documents and consults on real estate matters.^[19] Smith, a former hair dresser, often inspected the A&F offices by walking through and doing "desk checks" to keep offices, conference rooms, and employee dress to strict standards published in employee memos. His involvement with the running of Abercrombie & Fitch has been criticised in some quarters as an example of poor corporate governance, since he holds no official position within the company. ^[20]

Controversies

In October 2012, Bloomberg News first reported on Jeffries' unconventional 1986 standards for his cabin crew on Abercrombie's Gulfstream G-V Jet, used exclusively by Jeffries, Smith and their dogs.^[21] The male models who work as stewards aboard the company jet are required to wear Abercrombie-branded polos, jeans, boxer briefs and flip-flops as part of their uniform, as well as a "spritz" of cologne. Toilet paper was to be folded a certain way and the cabin soundtrack was specified for each flight. 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.^[19] The suit was quickly settled out of court when Jeffries was ordered to testify by the presiding judge.^[22]

Male house staff for Jeffries, paid for by the Jeffries Family Office, is provided by the same modeling firm that supplies male staff for the company jet.^[19]

In a 2006 interview with Salon, he stated that his clothing line is exclusively for "cool" people. Moreover, he has said he does not want overweight or unattractive people to wear his clothes.^[23] The comments, which came to light in 2013, drew negative publicity for the company and criticism from notable figures such as Donny Deutsch.^[24][25]

References

External links

• 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.

External image

Photo used in Salon.com interview

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