Abercrombie & Fitch (A&F) was once a shining retail apparel star among teens and young adults. However, the chain has faced some tough times in recent years.
“Abercrombie’s predicament, perhaps because of the cultural clout it once wielded, feels especially acute. ‘The sexy collegiate image fit into the age of Gossip Girl and 90210,’ says retail analyst Wendy Liebmann, ‘but now it feels like it’s grounded in an era that’s at least ten years old. I don’t think shoppers in the U.S. and Canada have totally walked away. But, as a whole, I think shoppers have moved on.’ Last year, shortly after Abercombie announced a $15.6 million quarterly loss, Engaged Capital, a California company that holds about 400,000 shares of Abercrombie stock, wrote an open letter to the Abercrombie board demanding Jeffries’s ouster.” [Susan Berfield and Lindsey Rupp, Bloomberg Businessweek, February 9, 2014]
“The retailer and its competitors have been struggling as young people increasingly spend money on smartphones and lattes instead. Abercrombie CEO Mike Jeffries retired last week after two decades at the helm.” [Ashley Lutz, Business Insider, December 16, 2014]
Now, Bloomberg Businessweek’s January 22, 2015 cover story is titled “The Aging of Abercrombie & Fitch” and comes with the following distressing photo.
In this cover story, Berfield and Rupp report that:
“Abercrombie is a $4 billion company with three brands and about a thousand stores in 19 countries. A&F is for college-age men and women, Hollister is for 12- to 18-year-olds, and abercrombie — with a little “a” — is for those under 12. The Abercrombie look across the brands remained almost unchanged since Jeffries first defined it in the mid-1990s: sweatshirts and sweatpants and hoodies — until recently with huge A&F and moose logos — as well as graphic T-shirts, polo shirts, jeans, shorts, and flip-flops. Stores, mostly in malls, had dark wood shutters and played loud dance music. Black-and-white photos of young men and their abs adorned the walls and the shopping bags.”
“The attitude — conformist, sexy, exclusive — hadn’t evolved much, either. But teens have. They are shopping at fast-fashion chains such as Forever 21 and H&M, which are dirt cheap. Jeffries didn’t think A&F should discount. He wouldn’t sell clothes bigger than women’s size 10 until about a year ago. It wasn’t until last spring that he allowed the lights to be turned up in the Hollister mall stores and the shutters taken off the A&F ones. He lowered the music and reduced the amount of cologne sprayed in the stores by exactly 25 percent. And he agreed that the logos had to become less prominent, too.”
Can A&F turn things around?