On A&F And Mike Jeffries
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.