Abercrombie & Fitch CEO Mike Jeffries' Controversial Comments Cause Decline In Sales For Abercrombie, Hollister?
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Abercrombie & Fitch announced that its sales have fallen 17% in the first quarter following the controversy over CEO Mike Jeffries’ comments that the brand markets exclusively to “cool, good-looking people” and will not carry women’s clothing over size 10.
The Huffington Post reports that future profit forecasts have been cut and Jeffires said that the root of the problem is inventory shortages.
Though Abercrombie & Fitch has been the target of recent controversy, the decline in sales actually began before the controversy started.
According to the Los Angeles Times, Abercrombie & Fitch lost $7.2 million, or 9 cents a share, and lost $21.3 million, or 25 cents a share, during the same period a year ago.
The brand had expected the loss to be 5 cents a share. Revenue also decreased 8.9%.
Investors found it troubling that same-store sales decreased 15%, declining 13% for Abercrombie and Fitch and 18% for Hollister, which is owned by Abercrombie & Fitch.
The company said it expects to close 40 to 50 stores this year.
Jeffries caused controversy when his statements from 2006 were brought up in articles about Abercrombie & Fitch’s refusal to carry women’s clothing over a size L, or a size 10, despite the fact that they carry men’s sizes up to XXL.
“That's why we hire good-looking people in our stores,” Jeffries said. “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.”
“In every school there are the cool and popular kids, and then there are the not-so-cool kids. Candidly, we go after the cool kids. We go after the attractive all-American kid with a great attitude and a lot of friends. A lot of people don't belong [in our clothes], and they can't belong. Are we exclusionary? Absolutely,” he said.
Read more about the Abercrombie & Fitch controversy below:
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May 27, 2013 12:20 PM EDT