- By Rianna Croxford and Ruth Evans
- BBC News and BBC Panorama
The former head of Abercrombie & Fitch is suing the firm for refusing to cover his legal fees after he was accused of running a sex trafficking operation.
A lawsuit filed in October alleged the US retailer had funded a “criminal enterprise” run by Mike Jeffries over two decades.
It came after a BBC investigation revealed allegations that he had exploited young men for sex as CEO.
In response, Mr Jeffries has now taken legal action against the brand.
In exchange for serving as CEO, Abercrombie & Fitch (A&F) offered to indemnify Mr Jeffries for any claims arising out of his position with the company, according to the lawsuit filed in Delaware state court.
This included any threatened, asserted, pending or completed claim “whether civil, criminal, administrative” or other, his legal complaint says.
The contract also required the brand to either reimburse or provide advance payment to Mr Jeffries, at his request, in connection with any claim, the lawsuit adds.
But A&F has rejected his demand to cover his legal fees, it claims.
If you’re in the UK: Watch Panorama’s 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’re in the US: The Abercrombie Guys: the Dark Side of Cool is available to watch on BBC Select.
And if you’re outside the UK, listen to the podcast series, World of Secrets: Season 1 – The Abercrombie Guys, wherever you get your podcasts.
Mike Jeffries is considered the modern-day-founder of A&F after he transformed the brand in the 1990s from a failing heritage outfitter into a multi-billion-dollar teen retailer.
He stepped down in 2014 following declining sales and left with a retirement package valued at around $25m (£20.5m), part of which has now been suspended, the company says.
In October, a two-year BBC investigation revealed for the first time allegations that Mr Jeffries and his British partner had exploited young adult men for sex at events they hosted around the world including in London, New York and Marrakesh.
A BBC Panorama documentary and podcast series found a highly organised network used a middleman to recruit men for the events with Mike Jeffries and his partner Matthew Smith.
Following the BBC’s investigation, Abercrombie & Fitch was accused in a civil lawsuit of funding a sex-trafficking operation led by Mike Jeffries and Mr Smith between 1992 and 2014.
The earlier lawsuit, filed in New York, is seeking class action status and alleges that it is likely more than 100 men were sexually abused by Mr Jeffries while he was chief executive.
It also claims that he used A&F’s corporate resources including a jet, transportation, and unlimited amounts of cash to facilitate this venture.
Mr Jeffries declined to comment at the time, with his lawyer saying: “The courtroom is where we will deal with this matter.” Mr Smith has never responded to the BBC’s requests for comment.
Since learning of the sex trafficking lawsuit, Mr. Jeffries made an initial demand to A&F to cover his legal fees but claims this was rejected and a second request to the company was ignored, according to his lawsuit against the brand.
It adds that: “The New York Action repeatedly and explicitly alleges that Mr. Jeffries’ wrongdoing arose from his role as the then-CEO of Abercrombie”.
It also claims that: “At all times material, Mr. Jeffries was acting as Abercrombie’s agent when he was recruiting male victims to engage in sex trafficking under the guise of legitimate modelling opportunities.”
Mr Jeffries is demanding that the company reimburse him for his “reasonable fees and expenses” incurred to date in connection with the sex-trafficking lawsuit as well as make advance payments on an ongoing basis.
A&F has been approached for comment. The company previously told the BBC it did not comment on pending litigation.
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Robert Johnson is a UK-based business writer specializing in finance and entrepreneurship. With an eye for market trends and a keen interest in the corporate world, he offers readers valuable insights into business developments.
