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Abercrombie & Fitch Might Pay for CEO Jeffries' Sins

Stocks in this article: ANF

NEW YORK ( TheStreet) -- In 2013, Mike Jeffries of Abercrombie & Fitch (ANF) is the CEO people most love to hate.

Jeffries, who was born in 1944, is the very picture of Dorian Gray. (Read Oscar Wilde's novel free at Project Gutenberg.) From a distance he looks like he was born in 1984. Blogger Uglyboyfresh calls him a cross between Joan Rivers and Gary Busey.

Jeffries built Abercrombie & Fitch from nothing, after The Limited (now known as L Brands (L Brands)) bought it out of bankruptcy in 1988. He saw it as a high-fashion store for the young, suburban and beautiful. It was spun out of The Limited in 1996 to trade on its own and has been paying dividends since 2004. If you'd invested $100 in the company's shares in 1996, you'd now have about $450. Before the Great Recession, this was an $80 stock, and it nearly returned to those heights again in 2011.

Mike Jeffries is a proud man, a vain man, and wants others to see him as a great man. So in 2006 he opened up to Salon, surrounded by young, attractive acolytes, and admitted "We go after the cool kids," adding that his brand is "exclusionary."

The interview waited until this year to explode over the Internet, until after Swedish rival H&M began featuring a plus-sized model, an online petition gained support of the masses and celebrities voiced their disdain.

Suddenly the beautiful people, who all want to look like A&F but don't want anyone to know they disdain their less-attractive friends, rose up in anger. Reportedly Ellen DeGeneres condemned the chain on her TV show. Miley Cyrus said she was going to burn her A&F wardrobe. Videographer Greg Karber dressed homeless people in A&F gear as a protest.

Jeffries did what you'd expect. He apologized. He had his executives deliver that apology to protesters in person, and ABC did the story for its "Good Morning America" show.

Worse, the controversy started hitting Abercrombie & Fitch's top line. Sales during the spring quarter, ending in May, were down almost 10% from the same period a year ago. The stock fell from $56 in late May to $43.50 in late June.

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