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Clothes are flags waved by our bodies, but their signals are open to interpretation. To some, cargo shorts and a denim shirt send the message "summer casual" or "comfy." To others, cargo shorts and a denim shirt speak of defeat and lack of invention, the sartorial equivalent of a statement like: "Oh, I don't know. I'll just have vanilla," or "I don't really read fiction." Only in the dystopia of high school would the cargo-denim flag, and its accompanying baseball cap and flip-flops, be interpreted as "cool."

But youth is the target market of Abercrombie & Fitch, a brand whose look is built around cargo shorts and features hairless boy-band-aspirants in madras button-downs and skinny girls in mini-skirts and tank tops; clothes so generic they make Wal-Mart look runway-ready. A&F found itself publicly scolded recently when a 2006 quote from CEO Michael Jeffries resurfaced and began pinballing across the Internet: "We go after the cool kids. We go after the attractive all-American kid with a great attitude and a lot of friends. A lot of people don't belong in our clothes and they can't belong. Are we exclusionary? Absolutely." What Abercrombie & Fitch doesn't seem to know is that "exclusionary" has never been less cool.

Nonetheless, in keeping with Jeffries's clubhouse attitude, the company rarely makes clothing above size 10 for women, and doesn't do XL or XXL. Men, on the other hand, are allowed to be a little chunkier.

The idea that a size 12 woman is a blight upon fashion, and the way that Jeffries's comments made him sound like a grown-up giving a freshman a wedgie, triggered a media maelstrom and a swell of consumer activism. There have been protests outside stores and a blogging mom in Ohio sent back her daughter's clothes. An online petition started by an 18-year-old boy who struggled with an eating disorder has garnered more than 73,000 signatures so far, bidding A&F to "Stop telling teens they aren't beautiful and start making clothes for young people of all shapes and sizes!" Ellen DeGeneres and Kristie Alley publicly booed the company for its bullying ways, and a comic viral video – hashtag #Fitchthehomeless – encourages disgruntled patrons to give away their A&F clothes to homeless people.

Abercrombie backpedalled with an apology, but Millennials aren't impressed: An American brand index survey by YouGov found that since Jeffries's comments exploded, consumer perception of the brand by those between 18 and 34 has dropped to its lowest point since last October. This generation may be screwed in terms of job prospects, but they have social-media superpowers that are translating into consumer power, too. A single Facebook page eventually led to demonstrations in 52 countries recently against Monsanto, the agribusiness giant that's become a stand-in for the debate over genetically modified foods. Ignoring the impact of a kid with a smartphone is corporate arrogance.

Of course, Abercrombie & Fitch is a private company that can sew and sell whatever it likes, but in Canada, according to StatsCan, 7.6 million Canadian men and 5.6 million of women are either obese or overweight. That's a lot of potential customers who need clothes.

Jeffries's comments were hateful but also woefully out of touch for someone in an industry that requires a close reading of the culture. Casual discrimination against the fat just doesn't fly like it used to. What if Abercrombie & Fitch had announced it didn't want Chinese or gay people to sully their clothes? XL doesn't mean ugly, or unstylish. While the A&F scandal was blowing up, H&M put plus-size model Jennie Runk on its homepage, starring in a new swimsuit collection. Her size 12 body wasn't flagged as "plus," but simply integrated into the collection – a new flag for normal.

Abercrombie & Fitch seems caught in a 1950s version of youth culture, where jocks battle nerds, and phrases like "All-American" are code for blond (the company has paid out $40-million [U.S.] in a class-action law suit about discriminatory hiring practices). But Jeffries is 68, and he may have some personal complexes about what's attractive: His own face appears heavily surgeried – he has that surprised cat look – and he allegedly fired his personal pilot for being too old.

So perhaps he's been too busy to notice that nerds are the new cool. In The Social Network, it's not the Abercrombie & Fitch-styled blond rower twins that walk away with Facebook billions. The spoils go to Mark Zuckerberg, a fashion-free programmer in a no-logo sweatshirt. The Internet unites the obsessives, and when those obsessions translate into consumer activism, corporations are forced to take note. They may be a generation living in their parents' basements, but until mom and dad cut off their WiFi, the Millennials have a kind of power that any 68-year-old looking for their business would do well to respect.

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