Starting Friday, you won’t have to be good-looking to work for Abercrombie & Fitch Co. You’ll also be able to wear eye-liner, though not necessarily a nose ring.
The changes are the latest for the once high-flying retailer, which pioneered the sexy preppy look and made male models with ridiculously ripped abs a billboard standard. By retiring the “appearance and sense of style” hiring rule that stipulated attractiveness, Abercrombie is scrapping the last of the legacy of former Chief Executive Officer Mike Jeffries, who left in December.
“We’ve put the customer at the center of the business,” said Christos Angelides, president of the company’s Abercrombie brand, who along with Fran Horowitz, the Hollister brand’s head, are among the internal candidates for the CEO job.
Sitting at a conference table with Chief Operating Officer Jonathan Ramsden at the company’s wooded campus in New Albany, Ohio, the two presidents said that dress-code and other changes are part of their plan to cater more to shoppers. For too long, they said, stores and clothes were tailored to Jeffries’s whims.
So gone is the legendary “Look Policy” for employees, which banned French-tip manicures, certain hair-styling products and, among other things, mustaches. Clerks will be referred to as brand representatives, not models. They still can’t wear extreme makeup or jewelry, but the rules are gentler. The idea is that sales forces should focus on selling, not on obsessing over their level of accepted handsomeness.
Jeffries turned Abercrombie into a global brand during his 22-year reign, and the retailer has 965 stores in more than 20 countries. But as sales fell, his management style was questioned. He had a 40-plus page manual dictating the behavior and dress of passengers and where his dogs should sit on the company’s Gulfstream G550 -- which is now up for sale -- and until last year he refused to sell clothes in the color black.
In 2013, activist investor Engaged Capital LLC began calling for Jeffries’ ouster. Last year, the company stripped him of his chairman role, brought in Angelides and Horowitz to differentiate the two brands and promoted Ramsden. The trio’s running the company along with Chairman Arthur Martinez.
“Inevitably, there’s still some people wondering what’s going to happen,” Ramsden said. But “things are running along -- there’s a clear sense of what needs to be done.”
Sales in established stores have fallen in six of the past eight years. Abercrombie profit shrank 5.1 percent in 2014 and same-store sales tumbled 10 percent last quarter, which included the holiday season.
The company’s switched things up in the past year in A&F and Hollister stores, turning up the lights, turning down the music and cutting way back on the level of Fierce and other colognes shoppers are forced to breathe. “We exist to serve shareholders,” Martinez said, “but if we don’t serve the customer, the shareholders will never get rewarded.”
Managers can decide where and how products are displayed, which was once unimaginable. When new stores open, shirtless hunky young men no longer greet patrons outside. In fact, by the end of July, sexualized marketing images will be gone from shopping bags, in-store photos and gift cards.
But the retailer can’t go too far too fast, Horowitz said. “We do have very strong, iconic brands, and our intent is to make sure that we keep the spirit of those things alive while modernizing what’s happening here.”
Changes were visible at test stores behind unmarked doors across the campus, where strikingly young employees zipped from the cafeteria to peripheral buildings on Razor scooters. A Jennifer Lopez song played over loudspeakers in one test store, a departure from the thumping house music of the past.
The company was mocked for the “Look Policy,” and sued over how it was implemented. U.S. Supreme Court justices heard arguments in February in the case of Samantha Elauf, a Muslim teenager who was denied a job because she wore a head scarf. Abercrombie agreed to pay $71,000 to settle two suits similar to Elauf’s in California in 2013. In her case, the company argued its actions were legal because it didn’t have “actual knowledge” that Elauf wore the scarf for religious reasons. A federal appeals court sided with Abercrombie, and Elauf appealed to the high court.
Abandoning the dress code and brightening the lighting in stores are necessary steps, but they’re not as important as the product line, said Howard Tubin, a Guggenheim Securities LLC analyst. For one thing, he said, Hollister, aimed at younger teens with a Southern California influence, needs to develop a look that’s more distinct from A&F offerings.
“They need to drive traffic with new and interesting and innovative product -- that hasn’t been the case in the last few years,” said Tubin, who has a neutral rating on the shares. They rose 3.3 percent at the close in New York Thursday. Abercrombie has slid 20 percent this year, compared with a 2.6 percent gain for the Standard & Poor’s 500 Index.
Its comeback “is going to be a process,” Ramsden said. “We’ll fine-tune some things going forward. The important point is there’s a strong conviction we’re going down the right path.”