The details of the case also come at a time when the sales at the company whose marketing flaunts youth and beauty with scantily-clad models are slumping. After over a decade of continuous growth, since 2008 the company's revenue has slipped, and in its previous two fiscal quarters dropped 2.5 percent. The retailer announced this summer that it will shutter 180 U.S. locations through 2015.
The sales slump may be a symptom of the retailer's need for an image rebrand after a successful 13-year run, according to retail analyst Jennifer Black. In her second-quarter analysis of the retailer, she notes that the exiting of poorly performing stores along with better expense control will improve earnings.
"Mike [Jeffries] is very talented merchant, but I feel like the stores -- the whole dark environment -- it's just not cool in the U.S. anymore,' she told ABC News. "I do think they could turn it around if they downsize to productive stores in productive malls, while simultaneously changing the merchandise to inject more fashion so it doesn't look so much the same. "
Black said in her report that she thinks the brand could be poised for a comeback in the critical holiday season and throughout 2013.
In 2008, A&F renewed Jeffries' employment agreement until February 2014.