Jim Carroll

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Abercrombie & Fitch’s private planes and big losses

You can’t buy publicity like this, which is bad news for the Dublin-bound Abercrombie & Fitch. The US clothes retailer, which opens its first Irish outlet later this week on College Green, has found itself in the news columns of …

Tue, Oct 23, 2012, 09:26


You can’t buy publicity like this, which is bad news for the Dublin-bound Abercrombie & Fitch. The US clothes retailer, which opens its first Irish outlet later this week on College Green, has found itself in the news columns of late thanks to A&F CEO Michael Jeffries’ Gulfstream G550.

Abercrombie & Fitch hit Dublin: moose logo on model’s boxer shorts out of picture

Businessweek got their mitts on the 40-page manual given to the male attendants who worked on the plane and it was a hoot. Per Sapna Maheshwari’s report, “clean-shaven males had to wear a uniform of Abercrombie polo shirts, boxer briefs, flip-flops and a “spritz” of the retailer’s cologne…black gloves had to be used when handling silverware and white gloves to lay the table, the song “Take Me Home” had to be played when passengers entered the cabin on return flights and Jeffries’s dogs — identified in the document as Ruby, Trouble and Sammy — had different seating arrangements based on which ones were travelling.”

As with all CEO excesses, such behaviour would be tolerated (to a point) if the CEO was presiding over a successful company. But A&F is no longer making the mad cash from selling jeans, polo shirts and tops bearing the brand’s logo which was once the case. Businessweek reported in August that the retailer’s US revenues had fallen 2.5 per cent in the first six months of this year, 71 shops had been closed and another 180 due for the chop by 2015. Not a pretty picture for Jeffries, the man who turned “a company that originally made safari and camping gear” into the A&F clothing brand we know today.

Jeffries and the company are now banking that revenues from its non-US stores will help shore up those losses, which is why they’re opening in Dublin where they believe a demand exists for A&F clobber (they’ve only to look at the revenue from their Hollister shop in the city for proof of this). The new Dublin store will undoubtedly see an opening quarter bounce bu virtue of the fact that they’re opening at the height of the shopping season and A&F junkies won’t have to go to the US to get their fix of that moose logo. That handsome College Green building is a big store and it’s going to need a lot of footfall to pay the bills for the multi-millon makerover.

But trends dictate how the wind blows in retail and A&F only have to ask Habitat, the previous tenants of their new digs, about that. They also know from their US profit and loss accounts that pricey jeans and tops can lose their lustre, especially at a time when money is tight all round. Then, there’s the not insignificant matter of how a huge brand like A&F goes about the process of reinvention. When you’re seen as the clothing choice of a certain generation, it can be difficult to change course and appeal to the next generation or your original fanbase who’ve moved on and won’t be caught dead wearing your clothes. This is where sister brands like Hollister and Gilly Hicks enter the equation, but A&F remains the cash-cow at the top of the balance sheet. Add in the PR barney caused by silly instructions to the staff on your private jet and you can understand why the company hopes some good news stories and exceptional revenues from new stores like Dublin are on the way.

Of course, if Jeffries and the company want advice on how to weather these storms, they can always pop around the corner from their new Dublin hang and drop into American Apparel. Now, there’s a CEO who knows all about PR trouble – not to mention ongoing losses.

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