Mike Jeffries (CEO)

Michael Stanton Jeffries (born July 15, 1944) is an American businessman. He helped reestablish the clothing company Abercrombie & Fitch , and served as CEO until 2014.

Mike Jeffries
Born
Michael Stanton Jeffries

(1944-07-15) July 15, 1944
NationalityAmerican
Alma materClaremont McKenna College
Columbia Business School
OccupationBusinessman
Known forFormer Chairman and CEO of Abercrombie & Fitch
Spouse(s)Susan Hansen

Early life

Jeffries was born on July 15, 1944, the son of Mr. and Mrs. Donald R. Jeffries.[1] 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]

Career

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 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.[5]

Abercrombie & Fitch Co.
Further information: Abercrombie & Fitch
The chain store design in the early 1990s

Jeffries was hired in 1992 by Leslie 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.

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] On December 22, 2008, A&F corporate announced that it had been renewed.[10] It expired on February 22, 2014.[10]

After a slump in 2008 due to the financial crisis, 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]

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

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.

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.[20] 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

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
  • 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.{{cite journal}}: CS1 maint: multiple names: authors list (link)

References
  1. NYT Staff, Hansen, S.M.I & Jeffries, M.S. (March 14, 1971). "Susan Hansen Sets Nuptials". The New York Times. Retrieved April 19, 2022. Miami Beach, Fla., March 13—Miss Susan Marie Isabel Hansen and Michael Stanton Jeffries, both of New York, plan to be married on April 3 in the garden at the home of Miss Hansen's parents here on Biscayne Bay...{{cite web}}: CS1 maint: multiple names: authors list (link).
  2. Denizet-Lewis, Benoit (January 24, 2006). "The Man Behind Abercrombie & Fitch". Salon.com. Archived from the original on November 16, 2007. Retrieved December 8, 2007.
  3. Barmash, Isadore (September 1, 1989). "Alcott & Andrews Seeking Protection From Creditors". The New York Times. Retrieved April 19, 2022.
  4. Barmash, Isadore (October 14, 1989). "Alcott & Andrews to Close Its Stores". The New York Times. Retrieved April 19, 2022.
  5. Minato, Charlie (June 23, 2012). "How Abercrombie & Fitch CEO Mike Jeffries Is Screwing Up America's Sexiest Brand". Business Insider. Retrieved April 18, 2022.
  6. Feller, Madison (April 19, 2022). "Where Is Mike Jeffries, Abercrombie & Fitch's Former CEO, Now?". Elle. Retrieved April 20, 2022.
  7. Farfan, Barbara (August 23, 2018). "Quotes from Mike Jeffries, former Abercrombie & Fitch CEO". The Balance—Small Business. Retrieved April 19, 2022. Quotes About His Business Philosophy and Sexualizing a Retail Brand... Protesters speaking out against Jeffries' controversial statements{{cite web}}: CS1 maint: url-status (link).
  8. Rooney, Ben (September 28, 2009). "Corporate Library 'Highest Paid Worst Performers' 2009". CNN. Retrieved May 12, 2010.
  9. Farfan, Barbara (September 7, 2009). "CEO Mike Jeffries Overvalues His Own Brand and Loses His Cool After Teen Shoppers and Investors Don't Aspire To Abercrombie Any More". Barbara's Retail Industry Blog. Archived from the original on September 12, 2009. Retrieved April 19, 2022 – via About.com.
  10. Abercrombie & Fitch Staff (December 22, 2008). "Abercrombie & Fitch Enters Into New Employment Agreement with Michael S. Jeffries, Chairman and CEO" (Press release). Abercrombie & Fitch Co. Retrieved January 6, 2008.{{cite press release}}: CS1 maint: url-status (link)
  11. Jannuzzi, John (December 9, 2014). "Abercrombie CEO Mike Jeffries is Out, but How Bad Has it Gotten, Really?". GQ. Retrieved May 21, 2021.
  12. Equilar.com. {{cite web}}: Missing or empty |title= (help); Missing or empty |url= (help)
  13. Maheshwari, Sapna (October 18, 2012). "Models on Abercrombie Jet Had Rules on Proper Underwear". Bloomberg Businessweek. Retrieved May 9, 2013.
  14. Booton, Jennifer. "A&F Doubles Down on CEO Jeffries". FOX Business. Retrieved December 9, 2013.
  15. Karr, Arnold J. (December 9, 2013). "Abercrombie Extends Michael Jeffries' Employment Contract". WWD. Retrieved December 10, 2013.
  16. Greenberg, Herb (December 19, 2013). "And the Worst CEO of 2013 Is...?". TheStreet.com. Retrieved April 19, 2022.
  17. Brodie, Lee (November 14, 2013). "Top CEO lands on Cramer's Wall of Shame". CNBC.com. Retrieved April 19, 2022.
  18. Rupp, Lindsey (December 9, 2014). "Abercrombie CEO Leaves Chain After Overseeing Rise and Fall". Bloomberg Business.
  19. Kell, John. "Abercrombie's CEO Mike Jeffries steps down". Fortune. Retrieved December 10, 2014.
  20. Maheshwari, Sapna (May 22, 2013). "Abercrombie Execs Troubled By Involvement Of CEO's Partner". BuzzFeed News (BuzzFeed.com). Retrieved April 19, 2022.
  21. Denizet-Lewis, Benoit (January 24, 2006). "The Man behind Abercrombie & Fitch". Salon.com. Retrieved April 19, 2022.
  22. Lutz, Ashley (May 3, 2013). "Abercrombie & Fitch Refuses To Make Clothes For Large Women". Business Insider.
  23. Sozzi, Brian (December 9, 2014). "3 Huge Reasons Abercrombie CEO Mike Jeffries Lost His Job". TheStreet. Retrieved January 16, 2020.
  24. Chittum, Ryan (October 19, 2012). "A CEO's High-Flying Standards". Columbia Journalism Review.
  25. Maheshwari, Sapna (November 21, 2012). "Abercrombie Settles Pilot Lawsuit After CEO Ordered to Testify". Bloomberg Business. Retrieved October 2, 2015.
External image
Photo used in Salon.com interview
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