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Mike Jeffries wants no fat customers at A&F. Bad business?

Mike Jeffries, CEO of Abercrombie & Fitch, has been accused by critics of excluding plus-sized customers from his stores. Unapologetically targeting thin, attractive customers is nothing new for Jeffries and Abercrombie, but can retailers afford to ignore a growing number of plus-sized shoppers? 

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Benoit Tessier/Reuters/File
Shoppers hold bags with clothing purchases on the opening day of operations by retailers Abercrombie & Fitch outside their Paris store on the Champs Elysees. CEO Mike Jeffries has been criticized for excluding overweight shoppers.

Abercrombie & Fitch is no stranger to controversy. Outside of its client base of upper middle class high schoolers, the high-end clothier might be better known for its scandalous catalogues and checkered history with hiring and labor regulations than it is for its jeans or tank tops. The retailer鈥檚 latest fracas? Its CEO, Mike Jeffries, stands accused of discriminating against plus-sized shoppers.

It started with author and retail analyst Robin Lewis, who claimed in an interview last week with Business Insider that Mr. Jeffries 鈥渄oesn鈥檛 want larger people shopping in his store, he wants thin and beautiful people.鈥 He went even further, suggesting that Jeffries 鈥渄oesn't want his core customers to see people who aren't as hot as them wearing his clothing. People who wear his clothing should feel like they're one of the cool kids,鈥 Lewis told Business Insider.

Those charges are nothing new, and Abercrombie & Fitch has lent them plenty of support. For one, the chain doesn鈥檛 carry plus sizes: Its women鈥檚 clothes only run from Extra Small to Large (no XL or XXL) and its jeans only go to a size 10 (plus sizes generally start at size 14).

Jeffries has been 鈥渦napologetic about this exclusionary marketing forever,鈥 says Steve Hoch, a marketing professor at the University of Pennsylvania鈥檚 Wharton business school in Philadelphia. "They have a very targeted, narrowly defined [customer] in age and what type of body, even what ethnicity you are, and they鈥檝e been able to hold onto it.鈥

What鈥檚 more, the CEO has made the point publicly that his store is for a very specific type of client, and that those who don鈥檛 measure up should probably shop elsewhere.

鈥淚n every school there are the cool and popular kids, and then there are the not-so-cool kids. Candidly, we go after the cool kids,鈥 Jeffries told Salon in 2006. 鈥淲e go after the attractive all-American kid with a great attitude and a lot of friends. A lot of people don't belong, and they can't belong. Are we exclusionary? Absolutely.鈥

Weeding out everyone but that perfect, popular, pretty shopper isn鈥檛 limited to sizing. There鈥檚 the prices: A&F is far more expensive than its competitors for the 18-22 demographic, like American Eagle and H&M (both of which sell XXL and plus sizes). It鈥檚 notorious for its lack of sales and discounts, even coming under fire for its refusal to lower prices or offer discounts in the thick of the Great Recession 鈥 a move that many analysts blamed for 10 straight months of聽 double digit sales declines in 2009 and the closure of over 150 stores. It has since refocused most of its development energies overseas, and had a strong fourth quarter in 2012, but its stock price is still a third below its pre-recession highs. The company's latest earnings results are scheduled to be released next week.聽

Abercrombie鈥檚 hiring practices, too, have a history of being exclusionary, to the point that it鈥檚 caused the company some legal problems. In 2004, the company reached a $4 million settlement in a class-action lawsuit charging that it discriminated against minorities in its hiring procedures; the suit required A&F to put several policies in place to encourage building a more diverse workforce.聽

But apart from the colorful interviews and legal troubles, Jeffries鈥 targeted marketing is merely a less polite version of what most retail brands do, anyway, Mr. Hoch points out. 鈥淲hat they鈥檙e doing is just a little more extreme than what every brand does, he says. 鈥Aeropostale, American Eagle, Urban Outfitters. There is a fairly specific identity that each brand is trying to offer up to younger consumers.鈥

When the brand was hugely popular, in the late 鈥90s and early 2000s, that strong brand identity was an advantage for A&F, which doesn鈥檛 鈥済et caught up in not being willing to sacrifice certain customers.鈥 He points to Gap as a telling counter-example, a now-declining brand that tried too hard to be all things to all people. 鈥淎bercrombie signals something about how you want people to look at you. The Gap doesn鈥檛.鈥

What鈥檚 less clear is whether any retailer can afford to ignore the plus-sized demographic of shoppers. According to a 2008 survey from the market research firm Mintel, the most frequently worn women鈥檚 size in the US is a 14, and an estimated 67 percent of Americans are considered plus-sized. Yet their retail market share is disproportionally limited. Few brands, other than Lane Bryant, exclusively target plus-sized shoppers, and until recently, stores like American Eagle and Chico鈥檚 that sold bigger sizes 鈥渄idn鈥檛 talk about it,鈥 Hoch says.

That鈥檚 starting to change. H&M recently hired a plus-sized model as the face of its new swimwear line. Old Navy and Levi Strauss & Co., The Limited, and other retailers are slowly rolling out lines and stores specifically for plus-sized customers. 聽

聽So, will Abercrombie & Fitch soften its targeted marketing to include a bigger customer (and customer base)? Jeffries didn鈥檛 budge on price during the recession, so it鈥檚 unlikely he鈥檒l budge on size, though his competitors are.聽

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