Oh. Abercrombie’s “The Situation” Stunt Was Planted To Hide Bad News.
11:45 am, August 18th | by Hillary Reinsberg
When Abercrombie and Fitch put out a silly press release on Tuesday saying they would pay Mike “The Situation” Sorrentino to stop wearing the company’s clothes, we immediately wondered what the underlying goal of this ridiculous PR stunt could be. We thought the Situation might actually be boosting stock prices. Could it be? Not quite, but shockingly not too far off. Though it may not have boosted stock prices, it looks like A&F CEO Mike Jeffries was actually using the whole Situation situation to distract investors from some less than savory company news.
The New York Post notes that the company’s stock fell a damning 8.7 percent yesterday, the S&P 500′s second biggest drop, after the company noted that costs would rise greatly in the next year. Though quarterly earnings were strong, rising costs of commodities and labor mean the company could face some financial woes in the near future. Bad news for stock prices.
So when Jeffries interrupted serious questions during the company earnings call this week to say, “Is no one going to ask about the Situation?” it looks like he was trying to pin our gaze on something sexy and silly to distract us from the boring stuff, like you know, labor costs and the price of materials. Sneaky sneaky. Too bad it didn’t work.