Brand Image vs Brand Reality in Mike Jeffries' Led Abercrombie & Fitch
Can Today's Abercrombie & Fitch Shake Brand Image Damaged by CEO Jeffries?
Under the leadership of CEO Mike Jeffries, the mission of Abercrombie & Fitch, the rhetoric about Abercrombie & Fitch, and the leadership decisions of Abercrombie & Fitch were all about building the value of the Abercrombie & Fitch "brand." The products, the customer experience, and the employee experience at Abercrombie & Fitch retail stores all revolved around "the brand" and the enormous value that Jeffries assigned to it.
While Jeffries seemed to fully embrace the notion that intangible brands can contribute enormous tangible value to a retail company, what he didn't seem to fully understand was the difference between brand image, which is found it a company's masterful marketing campaigns, and brand reality, which is found in a company's masterful products and customer experiences.
Images vs Reality
To take that brand image vs. brand reality theory out of the conceptual and into the practical, I recall a conversation that I had in a coffee shop in Toowoomba, Australia not long after Mike Jeffries' created a global consumer uprising against Abercrombie & Fitch with some remarks about plus sized teens which many found to be insulting at best and blatantly discriminatory at worst.
This conversation took place in a coffee shop with a group of millennials from Germany, the Netherlands, Australia, and the U.S. which brand-builders would have identified as a perfect focus group for Abercrombie & Fitch.
I was a fascinated observer when these millennials, spontaneously and organically started engaging in a lively discussion about Mike Jeffries. Both male and female from four different countries, they had all heard about Jeffries' elitist disdain for the XLers who dare to walk and shop among us, and they all had something to say about it, none of which was flattering or supportive for Mike Jeffries.
Before the Mike mocking subsided, Elsa, a Hollister-wearing German said, "I got this [Hollister-branded] t-shirt in a $5 bin when I was in New York. I don't shop at the Hollister store in Germany." When I asked why not, she said, "Because look at it! It looks like it's been washed a thousand times and I have not worn it much. Their stuff is not such good quality so I'm not going to pay $30 for a t-shirt."
Of all the derisive remarks that were batted around the table after that—and some of them were pretty ruthless—Elsa's remark would probably have been the most disturbing to Mike Jeffries. Not the part about the clothes being poor quality, but the part about the $5 bin. It's no secret that Mike Jeffries despised discount pricing. And whether there ever really was such a thing as a $5 bin in a New York Hollister store or not, the fact that a $5 price point would ever be associated with a Hollister garment - even in casual coffee house conversation—is probably enough to make Jeffries lose his private-jet-white-glove-served lunch.
And that, in my opinion, would illustrate how Jeffries' apparent misunderstanding about the difference between brand image and brand reality was so off the mark.
No matter how many shirtless boys, and cheer squad teen models he used to sexualize the retail experience and fabricate the Abercrombie & Fitch brand image, the bottom line reality of the Abercrombie & Fitch brand became tangible in the relationship between the customer and the product.
Disconnect Between Image and Quality
While Jeffries was seemingly singularly focused on building a brand image that would justify high-end prices, he forgot to notice that the quality of some of the merchandise he was selling had become low-end cheap. But the customers didn't fail to notice. And they didn't think it was cool, no matter what the latest Abercrombie & Fitch marketing campaign told them to think.
More Image Problems
Jeffries seemingly wasn't running a company for 22 years, as much as he was running an invitation-only clique.
While this put him in the right retail place at the right overconsuming time in the obscenely narcissistic nineties, Jeffries doesn't seem to realize that the clique grew up and disbanded. The invitations being sent to potential new Abercrombie clique members around the world in the years after the Great Recession were being rejected because consuming excess and exclusionary attitudes were no longer so "it" anymore.
Jeffries might argue that narcissism never goes out of style. But Abercrombie & Fitch's revenue, same-store sales, and stock price declines have outlived his tenure as CEO and seem to indicate that the number of people who agree with Jeffries' view of the consuming world has continued to get smaller year-over-year.
Jeffries really first started to lose the fabricated "cool" of the Abercrombie & Fitch brand in the U.S. when he alienated his customer base by refusing to adjust prices in response to the recession. Loyal Abercrombie & Fitch customers didn't think that was cool. And successful discounting strategies employed by Abercrombie & Fitch competitors like American Eagle, The Buckle, and H&M throughout the Great Recession revealed that Jeffries' defiant no-discount stance was more of a temper tantrum than a viable retailing strategy.
After leading the company into a steep recessionary slide, Jeffries tried in vain to find a new place on the planet where the Abercrombie & Fitch, Hollister, and Gilly Hicks stores could regain their cool. He didn't have much luck.
In the Vainglorious Style of Management handbook, it makes perfect sense to sign $7 million per month commercial leases in Hong Kong. But in other books—like accounting books—it was seemingly an arrogant and unsustainable leadership decision made in another misguided attempt to fabricate an image for the Abercrombie & Fitch brand that reality couldn't support. With Jeffries at the helm, the expansion of the Abercrombie & Fitch global flagship store fleet nearly halted.
In the post-recessionary years, Jeffries seemed to be waiting for superficiality and overconsumption to organically re-emerge, which didn't happen. He seemed to be willing to wait forever for Abercrombie and Fitch to regain its "cool" status so that by association he would retain his own (cool) status. But Jeffries was already in his seventies and if he waited much longer, his leader-of-the-teen-clique persona might have become a little bit more than a little bit creepy.
The reality of the Mike Jeffries brand was that if anybody was shocked by anything that Mike Jeffries said or did, in my mind they just don't know Mike Jeffries. He made no excuses for his beliefs. He made no apologies for his most controversial leadership decisions. And as a retail leader for the Abercrombie & Fitch future, eventually (and most say "finally") he made no sense.
Mike Jeffries' employment contract reportedly expired on February 1, 2014. Surprisingly it was renewed for one more year after that. Not so surprisingly, Abercrombie & Fitch continued on its downward spiral, and rumor had it that Mike Jeffries was allowed to resign in December 2014 in order to not end his 22-year Abercrombie & Fitch career with an "ousted" label.
Missing From the Most Valuable Brands List
When the ranking and evaluation list of the most recent Most Valuable Brands was released, there was one retail brand that was conspicuously absent—Abercrombie & Fitch. No matter how much Mike Jeffries exalted the Abercrombie & Fitch brand in his own mind during his tenure as CEO, according to brand consulting firm Millward Brown, the monetary value of the Abercrombie & Fitch brand was not enough to earn it a place on the annual Top 100 list.
The reality of the Abercrombie & Fitch brand is that for years it has been determined to be less valuable than KFC, Target, IKEA, H&M, Starbucks, Home Depot, and McDonald's - seven companies that I suspect made Mike Jeffries' spray-tanned skin crawl. In fact, if we look at a comparison of the World's Most Valuable Brands from the past eight years, we don't see the presence of the Abercrombie & Fitch anywhere.
Certainly, as a CEO Mike Jeffries was not completely wrong about every aspect of leading the Abercrombie & Fitch retail chain. For instance, he was right in his seeming understanding that the road between "not the most valuable brand" to "most hated retailer in history" is not a long one. But what he didn't seem to realize was that he was steering Abercrombie & Fitch down that very road.
So when the American Customer Satisfaction Index was released in February 2016 and Abercrombie & Fitch received the lowest customer satisfaction ratings in the history of that measurement system, it's not definitively clear how much of Abercrombie & Fitch's current negative relationship with consumers is connected to the negative relationship can be attributed to the controversial choices and words of Mike Jeffries.
But it seems fairly clear that the present consumer attitudes towards Abercrombie & Fitch are not completely disconnected from the legacy of the Mike Jeffries era. The story of the Abercrombie & Fitch retail brand is a cautionary tale to all old school brand-driven companies in all industries... brand image can change in an instant, but the brand reality is much harder to shake.