Abercrombie & Fitch suspends payments to former CEO after sex trafficking allegations
- By Rianna Croxford, Investigations Correspondent
- BBC News and BBC Panorama
US lawsuit accuses former Abercrombie & Fitch CEO Mike Jeffries of rape
Abercrombie & Fitch says it stopped providing supplemental retirement income to its former boss following sex trafficking allegations.
On top of his standard pension, Mike Jeffries received lifetime bonuses totaling around $1 million (£801,000) a year.
A lawsuit then accused the American retailer of financing a sex trafficking operation.
The brand told the BBC it had now suspended these additional pension payments to Mr Jeffries.
A BBC Panorama documentary and podcast series revealed a highly organized network used a middleman to recruit men for events around the world with Mike Jeffries and his British partner Matthew Smith.
The BBC spoke to eight men who attended the events, which took place in London, New York and Marrakech, among other cities, with some saying they were exploited or abused.
In the weeks that followed, Abercrombie & Fitch (A&F) was accused in a civil lawsuit of financing a “criminal enterprise” run by Mike Jeffries and Mr. Smith between 1992 and 2014.
Court documents allege it is likely that more than 100 men were sexually abused by Mr Jeffries while he was chief executive and that young men were manipulated “under the pretense of offering them the opportunity to model their dreams – to become an Abercrombie model.
It also claims the companies’ money and resources were used to “facilitate” a “sex trafficking enterprise.”
The company told the BBC it does not comment on ongoing legal proceedings.
Through his lawyer, Mr. Jeffries also declined to comment, with his lawyer saying: “It is in the courtroom that we will handle this matter.”
Mr Smith never responded to the BBC’s requests for comment.
Learn more about this story
If you’re in the UK: watch Panorama The Abercrombie Guys: The Dark Side of Cool, on BBC iPlayer now and listen to the podcast series, World of Secrets: Season 1 – The Abercrombie Guys on BBC Sounds.
If you are in the United States: The Abercrombie Guys: The Dark Side of Cool is available to watch on BBC selection.
And if you’re outside the UK, listen to the podcast series, World of Secrets: Season 1 – The Abercrombie Guyswherever you get your podcasts.
Mike Jeffries is considered the modern-day founder of A&F, who transformed the brand from a bankrupt sporting goods chain into a multi-billion dollar retailer aimed at teens.
During his two decades at the helm of the company starting in the 1990s, he led the company’s global expansion and created spinoff brands including Hollister and Gilly Hicks.
Mr Jeffries resigned in 2014 following a decline in sales and left with a retirement package valued at around $25m (£20.5m), according to company filings at the time .
Under the program, A&F said it was entitled to monthly payments for life totaling approximately $1 million per year, the documents add.
This voluntary company pension, called a supplementary executive pension scheme, is in addition to one’s standard pension. Records show Mr. Jeffries received payments as recently as this year.
A&F said Supplementary Pension Scheme payments to Mr Jeffries had been suspended, but it could not comment further due to ongoing litigation.
In a statement released following the BBC’s initial investigation, the corporation said it had hired an “external law firm” to independently investigate the allegations raised.
He added that the brand’s current management team and board were “unaware of the allegations of sexual misconduct” by Mr. Jeffries and that it had “zero tolerance for abuse, harassment or discrimination of any kind.”
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