Introduction Abercrombie and Fitch is a clothing company that is based in the US and has international branches which operate under the same name. The company was founded in the year 1892 David Abercrombie and was known as David T. Abercrombie co. The company has evolved through a series of events to what is now known as the Abercrombie and Fitch company, a reputable apparel and lifestyle brand. However, Abercrombie and Finch (A&F) image in the last two centuries has been battered by accusations of discrimination on minority groups and the physically challenged. The study seeks to research these accusations and relate them to the company's overall performance. In today's world the organisations ethics and morals play an important role in marketing the brand. A&F's blatant development of discriminative policies and practices has not only propagated negative ethnicity but has resulted in decreased sales and a battered public image.The company was founded by David Abercrombie in the year 1982. At this time the company was operating as a factory and upfront shop in the New York City. David Abercrombie was interested in developing outdoor gear for fishing and hunting. In the year 1900 Abercrombie met a lawyer known as Ezra finch who later on became a partner and the company was then renamed to Abercrombie and Fitch. In the 1930s Abercrombie and Fitch was one of the most successful sporting gear companies in the US. The company at one time ran bankrupt and in the year 1988 it was bought by limited Inc. Since then the company has been largely successful in the production and sale of male and female designer apparel. Today the apparel retail chain today deals with the sale of accessories and casual wear to target consumers aged between 18 and 22. The company has also gone ahead to develop a global presence by establishing international markets in various countries. The company has around 600 stores and 22,000 employees (Andersen, 2004).Abercrombie and Fitch (A&F) having more than three hundred stores in the US is a major employer in the fashion industry. The company is known for recruiting beautiful women and handsome men in its work force. The company employs sales representatives who bear the title "model". The concept behind this is influenced by the target consumers who are aged between 16 years to 22 years. This particular age group purchases clothes that make them look great and appealing. The models here are expected to boost the company sales. These sale employees wear clothes with the company logo as part of the marketing strategy. Other levels of employment include the impact team which is charged with the duty to control merchandise and maintain standards within each store and the visual managers who are charged with the duty of improving the brands image.Accusations of discrimination
Abercrombie and Fitch has been faced by accusations regarding discrimination against the minority groups. According to Meyers, (2008), Abercrombie and Fitch has been involved in discrimination of the minority groups during the employee recruitment process. According to the company's policies, only beautiful models are to interact with the customers (Dwight, 2005). The management believes that these beautiful models will be able to increase the company's sales. According to the company, the model should look American which discriminates against the minority groups. A store in Dallas had developed a beauty ranking system where models were rated on a zero to five ranking system (Meyers, 2009). People who were working in areas where there was constant interaction with the customers were supposed to have a high beauty ranking. Those who did not rank high in beauty were relegated to the back store where they performed tasks which were not stated in the employment agreement. This is because majority of them were employed as sales representatives. Representatives who were relegated to the back store mainly belonged to the minority groups. This is because they could not fit into the company's beauty standards. Majority of them were Hispanics, Asians and blacks. In fact Abercrombie and Fitch employed these people as sales representatives only to relegate them into the stock rooms where they were given other duties such as folding clothes which were not stated in the employment agreement. For a person to fit as an Abercrombie and Fitch sales representative also known as "model" he or she must show characteristics of being American (Greenhouse, 2003). It was reported that different top managers regularly visited the stores to check whether the employees conformed to the company's beauty requirements. Those who were found not to fit the beauty standards were kindly requested to take a different role which relegated them to jobs where there was less interaction with the customers. The problem with this is that majority of the employees who did not conform to these standards were from the minority groups.The discrimination caseThe aggressive attempt by Abercrombie and Fitch to develop a beautiful work force comprising of models did not go on well after showing outright discrimination of people on racial and ethnic grounds. Hiring people on the grounds of beauty is not in itself illegal but doing so on racial and ethnic grounds indeed goes against the law and morality (Dwight, 2005). Abercrombie and Fitch employed this strategy with an aim of increasing sales among the target customer group aged between 17-22 years. In addition to this Abercrombie and Fitch was not the only company to adopt the "beautiful models" strategy, in fact companies such as Benetton and Gap had used this strategy previously but recruited people from a diverse background (Dwight, 2005). Abercrombie's policy of hiring only white Americans in a society which is not predominantly American amounts to racism (Dwight, 2005). Mr, Tom Lennox, Abercrombie's communication director at the time insisted that they hired the models to act as brand representatives and ambassadors. He said that the models were hired to represent the natural classic American style (Bianchi, 2005).In 2003, Abercrombie and Fitch a lawsuit against the company was filed at a US district court in San Francisco. The charges stated that Abercrombie and Fitch discriminates against Hispanics Asians and blacks in its hiring as it targets to achieve what it regards as a natural, classic American look. The federal lawsuit was filed by nine Hispanic and Asian plaintiffs. The plaintiffs claimed that the apparel company discriminated against blacks, Asians and Hispanics by preferring American white employees (Bianchi, 2005). Various witnesses presented shocking evidence on racial discrimination that they had experienced while working for the company. Among other things the lawsuit stated that people belonging to the minority groups were channelled to other jobs such as in the stock rooms and back rooms where there was less interaction with the customers. Abercrombie and Fitch defended its self on grounds that they hired people whose main role was to market the brand which was distinctively American.
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This is not the first time that Abercrombie and Fitchwas accused for promoting racism. In fact in the year 2003 the company developed T shirts that bore the words "two wongs make a white" accompanied with an image of two stereotypical Chinese men with exaggerated eyes (Dwight, 2005). This sparked protest from the Asian community and anti-racist. In its defence the company spokesman said that the statement was not based on racism but humour (Dwight, 2005). However the company recalled the product and ceased its production. In addition Abercrombie and Fitch publishes and distributes a magazine which is called the look book. The magazine at this time displayed white American models to market their brands and enhancing the A&F look (Dwight, 2005). The company in addition publishes another magazine called the quarterly which at this time exclusively featured white models.In 2009 the company was accused of discriminating against Miss Dean, a 22 year old physically challenged worker who also happened to be a law student. Miss Dean who was born with a left arm missing uses a prosthetic arm (The BBC, 2009). This lawsuit seemed to carry a profound effect on Abercrombie and Fitch sales in the same year.Effect of the judgement As a result of the judgement the company ended the practise of recruiting individuals on racial grounds. The company agreed to pay forty million dollars to the plaintiffs who had sued the company for discrimination. In addition to this the company settled for an agreement with the United States Equal Employment Opportunities Commission (EEOC) (Maynard, 2007 and Bianchi, 2005). The agreement between the EEOC and Abercrombie and Fitch was known as the consent decree. In the consent decree Abercrombie and Fitch stores agreed to implement the following;Ensure equal employment opportunities for all. In this clause they agreed to "provide for the implementation of recruitment, selection and personnel systems that will ensure that African-Americans, Asian-Americans, Latinos and women are considered for recruitment, hire, job assignment and managerial promotion for which they are interested and qualified on a non-discriminatory basis" (Bianchi, 2005).The company developed a post of vice president on diversity who was to ensure that employment was streamlined and initiate diversity education programs to incorporate a diverse work force which would include members of the minority groups. The company also agreed to report progress on these issues on a regular basis to the EEOC (Bianchi, 2005).The company ensured agreed to abandon the practise of recruiting predominantly white employees which had contributed in the development of the A&F look. This decree forced Abercrombie and Fitch to embrace diversity in what was a landmark case on racial discrimination. Through the decree Abercrombie and Fitch was also required to avoid racial discriminations in its publications. To facilitate this, the company was ordered to feature members of the minority groups as models in its publications, TV commercials and purchased advertising (Bianchi, 2005)The company's distinctiveness which was based on the all-white look was transformed to that which includes the whole society. The consent decree received a lot of support from the public and private sectors. More people from the minority groups were encouraged to apply for jobs as models, sales representatives and the general work force in the company.The company later through one of its directors admitted that marketing that embraces diversity makes more business sense (Bianchi, 2005). This was a landmark settlement which ended discrimination based on racial and ethnic grounds in the company. As a result of this judgement Abercrombie and Fitch finally ended racial discrimination on the minority groups today the company has incorporated people from the minority groups in its workforce and advertisements.Effects of discrimination on the Abercrombie and Fitch salesAfter Abercrombie and Fitch was accused for discrimination against a disabled employee who had a prosthetic arm in June 2009 in the UK, the company in august the same year announced that same store sales had dropped by 30% as compared to the same sales in the year 2008 (Abercrombie and Fitch, 2009). This coupled with accusations of provocative advertisement on its Hollister line were thought to be the greatest contributors to the decreased sales. Although the court found Abercrombie and Fitch not guilty of the alleged discrimination the public still considered the company as being discriminatory (Lipka, 2009). The company on august 2009 posted a quarter net loss of US$ 26.7M compared to an income of 77.8M in the previous year 2008. The net loss decreased by 23/% down to 648.5M (Abercrombie and Fitch, 2009). in a statement the CEO and chairman Mike Jeffrey said:"We continued to be confronted with very challenging conditions during the second quarter. We believe we are doing the right things to address those challenges and improve our domestic business. In the meantime, we remain very encouraged by our prospects for international growth."Abercrombie and Fitch has faced various accusations on discrimination on several occasions. In previous times the effects of these accusations on the net sales was not significant. However the most recent accusation regarding discrimination of a physically challenged employee had a profound effect in reduction of the company's net sales. The court ruled that the company was not guilty of discriminating the employee however their public image was already ruined because people stopped purchasing their products. Today the customer wants to be associated with companies that practise good ethics and morals. The competition in the apparel industry is very high. Customers will opt not only for quality and pricing of goods but will also consider the companies moral profile.