Mike Jeffries (CEO)

Mike Jeffries
Born Michael Stanton Jeffries
July 15, 1944
Alma mater Claremont McKenna College
Columbia Business School

Michael Stanton "Mike" Jeffries (born July 15, 1944 in Oklahoma) is an American businessperson and was chief executive officer of Abercrombie & Fitch Co. until December 9, 2014.

Early life

Michael Stanton 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 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, although 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.

Further information: Abercrombie & Fitch
The chain store design in the early 1990s.
The logo of the new A&F.

Jeffries was hired by Leslie Wexner (CEO of Limited Brands, 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, Limited Brands 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 leader, 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 U.S. 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 renewed his employment agreement.[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 Feb. 1. That was down from $8.16 million in the previous year and $48.1 million before that.[15]

On 9 December 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.[16][17]

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] Separated for many years,[18] they have one child, Andrew Hansen Jeffries.[19]

Jeffries has a live-in partner named Matthew Smith and three dogs named Ruby, Trouble and Sammy.[20] 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.[20] 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. Smith's 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. [21]

Controversy

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.[22] 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.[20]

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.[20]

In a 2006 interview with Salon, he has stated that his clothing line is exclusively for "cool" people. Moreover, he said he doesn't want overweight or unattractive people to wear his clothes.[23] The comments came to light in 2013 and caused negative publicity about the A&F's marketing practices and target demographics.[24]

References

  1. ↑ 1.0 1.1 1.2 "Susan Hansen Sets Nuptials". The New York Times. March 14, 1971.
  2. ↑ 2.0 2.1 2.2 2.3 2.4 Denizet-Lewis, Benoit. "The Man Behind Abercrombie & Fitch". Salon.com, Burak KALAYCI the CO. Retrieved 2007-12-08.
  3. ↑ "Alcott & Andrews Seeking Protection From Creditors". The New York Times. September 1, 1989. Retrieved February 26, 2011.
  4. ↑ "Alcott & Andrews to Close Its Stores". The New York Times. October 14, 1989. Retrieved February 26, 2011.
  5. ↑ 5.0 5.1 "Mike Jeffries quotations".
  6. ↑ Rooney, Ben (September 28, 2009). "Corporate Library 'Highest Paid Worst Performers' 2009". CNN. Retrieved May 12, 2010.
  7. ↑ "Mike Jeffries Loses His Cool". retailindustry.about.com. Retrieved October 13, 2009.
  8. ↑ 8.0 8.1 8.2 "Abercrombie & Fitch Enters Into New Employment Agreement with Michael S. Jeffries, Chairman and CEO" (Press release). Abercrombie & Fitch Co. December 22, 2008. Retrieved January 6, 2008.
  9. ↑ equilar.com, retrieved 19 October 2012
  10. ↑ Maheshwari, Sapna (18 October 2012). "Models on Abercrombie Jet Had Rules on Proper Underwear". Bloomberg Businessweek. Retrieved 9 May 2013.
  11. ↑ Booton, Jennifer. "A&F Doubles Down on CEO Jeffries". FOX Business. Retrieved 9 December 2013.
  12. ↑ Arnold J. Karr (9 December 2013). "Abercrombie Extends Michael Jeffries' Employment Contract". WWD. Retrieved 10 December 2013.
  13. ↑ Greenberg: And the Worst CEO of 2013 Is...?, by Herb Greenberg, 19 December 2013, The Street
  14. ↑ "Top CEO lands on Cramer’s Wall of Shame". CNBC. Nov 14, 2013.
  15. ↑ "Abercrombie CEO Leaves Chain After Overseeing Rise and Fall". Bloomberg (Bloomberg). 10 December 2014. Retrieved 10 December 2014.
  16. ↑ "Abercrombie CEO Leaves Chain After Overseeing Rise and Fall". Bloomberg (Bloomberg). 10 December 2014. Retrieved 10 December 2014.
  17. ↑ Kell, John. "Abercrombie's CEO Mike Jeffries steps down". Fortune. Retrieved 10 December 2014.
  18. ↑ http://www.buzzfeed.com/sapna/exclusive-abercrombie-execs-troubled-by-involvement-of-ceos
  19. ↑ http://www.socialregisteronline.com/#!vartanian-jeffries-wedding/c1e2p
  20. ↑ 20.0 20.1 20.2 20.3 "Models on Abercrombie Jet Had Rules on Proper Underwear". Bloomberg News. October 18, 2012.
  21. ↑ "Exclusive: Abercrombie Execs Troubled By Involvement Of CEO’s Partner". BuzzFeed News. May 22, 2013.
  22. ↑ "A CEO's high-flying standards". Columbia Journalism Review. October 19, 2012.
  23. ↑ Salon: The man behind Abercrombie & Fitch January 24, 2006
  24. ↑ Business Insider: Abercrombie & Fitch Refuses To Make Clothes For Large Women. May 3, 2013

External links

External images
Photo used in Salon.com interview