On A&F And Mike Jef­fries

WWD Digital Daily - - Wwd -

In Jan­uary 2014, at the be­hest of a friend on the board of a trou­bled Abercrombie & Fitch, Arthur Martinez joined the com­pany as non-ex­ec­u­tive chair­man, strip­ping Mike Jef­fries, the mas­ter­mind of Abercrombie's re­mark­able as­cen­dance, of his chair­man po­si­tion.

Martinez sees young cus­tomers spend­ing more on tech and ex­pe­ri­ences, less on clothes, and get­ting so­cially con­scious, and Jef­fries los­ing touch with Abercrombie's ag­ing cus­tomers. A year later, Martinez gains author­ity as ex­ec­u­tive chair­man and Jef­fries is out as ceo.

Un­der Martinez, the team tones down the mar­ket­ing so mod­els are less shaved and more clothed, Abercrombie's tar­get au­di­ence ex­tends to twen­tysome­things, and the overly in­te­grated Abercrombie and Hol­lis­ter brands cre­ate new or­ga­ni­za­tions with new brand heads, Fran Horowitz at Hol­lis­ter and Chris­tos An­gelides at Abercrombie, to dis­tin­guish the brands bet­ter. Prod­ucts be­come less logo-ed, less throw­away and more lay­ered with higher-qual­ity fab­rics.

“Mike was a ge­nius for a long time — 17 of his 20 years at Abercrombie. He built a $4 bil­lion-plus re­tailer start­ing from zero, no stores, no prod­uct, only what came out of his mind. He was ab­so­lutely bril­liant. But he lost the plot,” Martinez said. “He ig­nored how tastes were chang­ing. How at­ti­tudes were chang­ing. He stayed with the same play­book when he needed to change the play­book. Like a lot of founders, he had his blind spots. He did not build an or­ga­ni­za­tion. He did not build peo­ple into real lead­ers. He was the cen­ter of the hub. Ev­ery­thing went through Mike. When the busi­ness started to go wrong, he re­ally didn't know what to do ex­cept to do the same thing harder. Com­ing to grips with his own sex­u­al­ity, frankly, im­pacted the way the com­pany pre­sented it­self to con­sumers. And peo­ple were get­ting very tired of that.

“Abercrombie re­minded me of Sears when I joined Sears,” Martinez said. “It was a great iconic Amer­i­can brand, down on its luck. Abercrombie had a very in­su­lar cul­ture. It was too fo­cused on its past and not on the fu­ture. There were a lot of smart, young, will­ing peo­ple in the com­pany, but there was no busi­ness ar­chi­tec­ture. The or­ga­ni­za­tional struc­ture was very mud­died. The good thing was that Mike was very [fis­cally] con­ser­va­tive so the com­pany was not in any fi­nan­cial stress. No big debt. No ques­tion of in­sol­vency. But there was per­for­mance stress. Sus­tained per­for­mance stress even­tu­ally leads to fi­nan­cial stress.

“My first meet­ing with Mike was very cor­dial. I was sur­prised by his modesty, his quiet de­meanor, his in­tel­li­gence. You ex­pected a guy try­ing to be big­ger than life. He wasn't. We talked for a cou­ple of hours in an air­port. We de­cided we could try to make this work. He wasn't great at shar­ing in­for­ma­tion. It was very clear that he was very proud of what he had created. He was con­vinced he knew the way to get the per­for­mance back on track. I never ex­pected him to show any doubt about that. Frankly, un­til the end, he didn't. The is­sue for me com­ing in was to start at the top of the pyra­mid. I made a whole­sale trans­for­ma­tion of the board and we turned to the ques­tion of whether Mike could lead the com­pany to where it needed to go. We de­cided af­ter sev­eral months we just couldn't go on with Mike as the ceo. There was clearly no one in the com­pany that was ready to step up to ceo. That was part of Mike's prob­lem. He never de­vel­oped real lead­ers in the com­pany. So they asked me to step in as ex­ec­u­tive chair­man,” in De­cem­ber 2014.

In De­cem­ber 2015, Horowitz stepped up as pres­i­dent and chief mer­chan­dis­ing of­fi­cer for Abercrombie and Hol­lis­ter, and An­gelides was forced out. “When we ap­pointed Fran ceo in Fe­bru­ary 2017, I told the board, ‘She is a rookie ceo. She would ben­e­fit from some men­tor­ing for a year.'”

Martinez stayed to guide Horowitz and re­tired (for the sec­ond time) in Fe­bru­ary. “I had con­fi­dence in Fran's in­tel­lec­tual and lead­er­ship skills,” Martinez said, ex­plain­ing why he left. “I'm get­ting a lit­tle old in the tooth. I am not in a race with Les Wexner to be the old­est liv­ing chair­man of a retail com­pany.”

— DAVID MOIN

A toned-down Abercrombie & Fitch cam­paign cel­e­brates di­ver­sity.

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