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Abercrombie & Fitch was once one of the edgiest brands in America; its controversial catalogues outraged parents and delighted teenagers. Abercrombie began by selling safari and camping gear to aficionados like Theodore Roosevelt and Ernest Hemingway. In 1992, Mike Jeffries took over as Abercrombie’s CEO and turned the company into a teen emporium where coolness and sexiness met Ivy League. Jeffries capitalized on Abercrombie’s reputation for quality. To make the brand more edgy, Jeffries recruited attractive all-American teens and college-aged kids to model products and work in the store. From 1995 to 2008, Abercrombie boasted sales more than 20 fold and net income more than 56 fold.

In 2008, the economy crashed, and consumers’ tastes changed. Consumers were no longer interested in $70 jeans that they could purchase for $40 elsewhere. Abercrombie did not alter its retail model to accommodate changing customer tastes and soon customers moved on. Since 2008, Abercrombie has closed 71 U.S. stores. Abercrombie is counting on international growth to keep the brand afloat; however, Europe suffers economic woes as well and Abercrombie’s international same-store sales dropped 26% in the second quarter of this year.

Abercrombie, as a fashion brand, has to compete by being edgy and cool. Today’s teenagers are no longer interested in the Abercrombie brand. Many are turning to American Eagle Outfitters, a retailer that sells similar styles at lower price points. Today’s teenager has a more individual style of his/her own; they are no longer interested in wearing what everyone else is wearing. In order for Abercrombie to win this customer back, it will have to develop creative ways to make the brand resonate with today’s fickle teenager.

Source: Sapna Maheshwari, “Abercrombie Sales Slide as Half-Naked Models Underwhelm: Retail,” Marketing Daily, August 22, 2012

 

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