Wealth Blog

Are Hong Kong kids 'cool' enough for Abercrombie & Fitch? Shares tumble after CEO gaffe

PUBLISHED : Monday, 27 May, 2013, 5:58pm
UPDATED : Tuesday, 28 May, 2013, 10:23am

It is wise to be very careful what you say in public. In the digital age, nothing is ever forgotten, as Abercrombie and Fitch’s chief executive officer Mike Jeffries now knows, to his cost.

The upmarket clothing company’s first quarter US sales fell 17 per cent, dramatically short of market earnings expectations. Offensive remarks by Jeffries in a 2006 interview that recently resurfaced are being blamed for the sales slump; he said a lot of people “don't belong” in the brand’s clothes – because they were for “cool kids" only.

“In every school there are the cool and popular kids, and then there are the not-so-cool kids,” Jeffries said in a 2006 Salon article. “Candidly, we go after the cool kids. We go after the attractive all-America kids 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.”

It proved the guy was not only bent on business suicide, but was racist and illiterate as well. The comments got dredged up again six years later - in a Business Insider blog detailing the reason why Abercrombie and Fitch only sells pint-sized clothes.

Howls of Protest

Not surprisingly, equality and every other sort of group is up in arms about it and for several weeks outraged protesters have been expressing their views at Abercrombie and Fitch outlets all over America and at the corporate headquarters in New Albany, Ohio.

Perhaps it’s time for this brand to reconsider its downer on fat kids – have they seen the average size of American teenagers? Apart from being offensive, he is probably excluding 50 per cent of his potential customer base. Fat teenagers have money too.

And how are his Asian customers meant to take this? The majority of the people who venture into his uninviting dark-as-night Pedder Street emporium are not “attractive all-America kids,” but Asians. They are the ones who are not repelled by the chokingly overpowering smell of cologne that pollutes Central. The only time I went inside it was too dark to see either the prices or the size of the clothes.

What’s even more extraordinary is that he did not say any of this in much less politically correct Asia, but in America, where you cannot even refer to someone’s ethnicity. Literally you can no longer call someone Chinese, or Irish, or whatever, although it’s both ethnically and culturally correct. They can only be referred to as “American Asians” or “Asian Americans” or whatever daft label is considered acceptable. So for Jeffries to refer to “attractive all-America kids” is hard to believe.

In one of the more amusing protests, Californian Greg Karber started a campaign: 'FitchTheHomeless', in which he hands out Abercrombie and Fitch clobber to homeless people. This has raised a laugh, but also made some people think he’s saying the homeless are therefore also uncool and unattractive.

So far, the sorries have been too little, too late. “We want to reiterate that we sincerely regret and apologise for any offense caused by comments we have made in the past,” one says rather lamely.

Jeffires told shareholders that the “first quarter proved to be more difficult than expected on the top-line due to more significant inventory shortage issues than anticipated, added to by external pressures.'

Presumably, he meant the external pressures of his feet inside his mouth.