Why has Abercrombie’s stock dropped more than 30 percent?
The CEO of Abercrombie & Fitch, Michael Jeffries, appears to be dumbfounded as to why he cannot get a pulse on the values of baby boomlets (people born between 1977 and 1994). This is quite surprising given the fact that Jeffries is paid more than $4 million per year. One would expect that he would have a firm grasp over statistical models that predict the values of young people.
Jeffries has failed miserably because he believes that the majority of young people are vain and motivated by self-interest. Abercrombie & Fitch features semi-naked photos of models and concentrates on selling a ‘cool’ high school mentality image. Jeffries’ leadership style is anachronistic and irrelevant in the modern era. The time of exclusive high school clubs and the general frat-house mentality that pervaded much of the past few decades is finally coming to an end.
How Value Types Influence Corporations
Materialist types are the ones Jeffries aims to target. The terms “materialist” and “post-materialist” were coined by Ronald Inglehart. Materialist types want security and a strong defense force. They operate from a position that psychologists would call the reptilian brain stem to stay above their competition and overcome insecurity. My estimates in 2007 indicated that they represent approximately 24% of the population, but they are a declining values type in the USA.
The post-materialist, on the other hand, values having more say on the job, cooperation, and beautification of their environment. My research has concluded that approximately 51% of the baby boomlet generation are post-materialists.
A sub-segment of the population is also highly interested pure altruism and would readily reject expensive clothing in favor of saving money to help others. I believe that Inglehart’s paradigm had overlooked the existence of pure altruistic value types. After extensive research, I labeled this group ‘exocentric altruistic types.’ Estimates in my book put the altruistic types at about 23% of the baby boomlet generation, and more importantly, the numbers of this cohort are on the rise.
Jeffries will hopefully be replaced as CEO of Abercrombie & Fitch in the near future. Let’s hope that the individual who replaces him catches onto the new trends in America, and for the sake of the employees at that company, is able to create an affordable clothing line with a sizable percentage of profits going to help clothe the homeless. The lesson to be learned for other corporations is that altruism, cooperation, and inclusiveness are popular and will become increasingly more desired in the coming decades.