Here's how Abercrombie & Fitch ditched its past to try to bring back customers (2024)

Crafting a brand is hard work. But harder still is reimaging it.

Sister brands Abercrombie & Fitch and Hollister were the go-to shops for teens in early 2000s. But as Abercrombie cultivated its rebellious image with half-naked models, controversies piled up, and its popularity fell.

By late 2013, activist investors arrived on the scene and pushed for the ouster of CEO Mike Jeffries. He had been hailed for orchestrating its success, but now as sales declined, some blamed him for being out of touch with shifts in consumer tastes. By December 2014, Jeffries retired.

After his departure, Abercrombie began to transform its image and ethos. Instead of excluding those who didn't fit Abercrombie's style, the company adopted a more inclusive attitude.

"We are a very different company than we used to be," Fran Horowitz, who was named CEO in 2017, said in an interview. "We are a much more inclusive company, we are closer to the customer, we're responding to the customer wants and not what we want them to want."

In April 2018, Horowitz laid out a four-prong vision: redesigned stores that are open; a more responsive supply chain; a seamless shopping experience online and off; and more targeted marketing spending, including an improved loyalty program. If you haven't been paying attention, the company might be unrecognizable.

Already half of all Hollister stores and 10% of Abercrombie's stores have been remodeled. Its supply chain is better able to respond to shifts in shopper tastes and its loyalty program now has 30 million members, up from 14 million in the year prior. The company began allowing Abercrombie and Hollister customers to pay with Venmo in August 2018, and the brands recently started offering checkout on Instagram — all in the name of making it easier for customers to shop its stores.

There are signs that consumers are responding well. In Piper Jaffray's biannual survey of teenage shoppers, the popularity of its key Hollister brand has been steadily rising. It ranked fourth among all clothing brands in the most recent poll, released earlier this month.

But in the fiscal first quarter of 2019, Hollister reported same-store sales growth of 2%. That missed analyst expectations of a 3.3% growth, sparking a sell-off of A&F shares and led investors to worry that momentum at the company's crown jewel was slowing. In the second quarter, same-store sales growth at both its Abercrombie and Hollister brands was flat.

The holiday season may prove to be a pivotal point. If sales at Hollister continue to slow, investors might double down on the belief that the brand is losing steam. If sales accelerate, however, that may indicate Horowitz's initiatives are winning over a new generation of shoppers.

As of this month, Abercrombie's stock has grown 26% since Horowitz took over in February 2017. But it had fallen around 28% this year as of early October.

Here's how Abercrombie & Fitch ditched its past to try to bring back customers (2024)

FAQs

Here's how Abercrombie & Fitch ditched its past to try to bring back customers? ›

In April 2018, Horowitz laid out a four-prong vision: redesigned stores that are open; a more responsive supply chain; a seamless shopping experience online and off; and more targeted marketing spending, including an improved loyalty program. If you haven't been paying attention, the company might be unrecognizable.

Why did Abercrombie lose popularity? ›

The company's popularity also declined due to shifting consumer tastes and the emergence of new players offering cheaper, trendier, and more socially responsible clothing options. In 2017, Abercrombie & Fitch hired a new CEO, Fran Horowitz, who initiated a strategy revitalization.

What is Abercrombie rebranding strategy? ›

Shirts and clothing items from the store no longer boast the company's logo or brand name the way they did back in the day. Instead, the brand has put more focus on increasing the quality of its products--and has scrapped its previously-limited sizing offerings in favor of more inclusive styles and sizes.

How did Abercrombie and Fitch fail? ›

The brand went on to face a class-action discrimination lawsuit, sexual misconduct allegations against the brand's primary photographer Bruce Weber during the early days of #MeToo, the infamous 2006 Salon interview of Mike Jeffries which led to a 2013 petition for inclusive-sized clothing and former L Brands CEO and ...

Why is Abercrombie making a comeback? ›

Abercrombie & Fitch is cool again, after years as the most hated retailer in the US, because it caught up to what millennials and Gen Z want. It's official — Abercrombie & Fitch is cool again. After a massive rebrand that embraces inclusion and more wholesome, brand-agnostic clothing, its stock is on the rise.

Do people still wear Abercrombie? ›

Today, Abercrombie's stores are lighter than they once were and its clothes are looser. The brand has become known for its (logoless) basics, loungewear and jackets. Instead of trying to dress high schoolers for class, Abercrombie tries to outfit adults for everything from the gym to happy hour.

What is the Abercrombie scandal? ›

The most high-profile case went all the way to the Supreme Court after A&F refused to hire a woman wearing a hijab because it violated the brand's “look policy.” (Abercrombie lost.)

What is an example of a rebranding strategy? ›

Dunkin. Say the word Dunkin, and you automatically think about donuts. Although that's a symbol of strong brand awareness, the brand decided to drop the word “donuts” in a rebrand to modernize customers' experience. They changed the look of their stores, got a new logo, and freshened up their brand messaging.

What makes a rebranding strategy successful? ›

Brand Building Plan

In professional services, it is essential that your employees embrace the new brand. After all, they are your product. It's also important that you build the brand in a way that communicates your firm's reputation and expertise, as well as its name. It must communicate your market positioning.

Is rebranding an effective strategy? ›

If your brand is seen as too similar to its competitors, it'll be hard to develop brand loyalty and achieve growth. A rebrand is a good strategy to help differentiate your brand in consumers' minds. Target's rebranding is a prime example of how this tactic can lead to great success.

When did Abercrombie start to decline? ›

Abercrombie survived the Great Depression and continued to grow, expanding to new states. But by the middle of the century, sales had slumped. Abercrombie filed for bankruptcy in 1977. In 1978, the brand was acquired by Oshman's Sporting Goods, a Texas-based retailer.

What is Abercrombie and Fitch weakness? ›

Weaknesses in the SWOT analysis of Abercrombie and Fitch

Employee management – One of the issues for which Abercrombie and Fitch received a lot of flak was their handling of employees. Employees were made to wear only A&F branded clothing which they had to buy a discounted price from the brand.

Why is Abercrombie closing? ›

The retailer cites a "significant downturn in business and a resulting corporate-wide reorganization" as the reasons for the closure.

Is Abercrombie and Fitch still making money? ›

Abercrombie & Fitch reported a surprise profit, raised its guidance and beat Wall Street's estimates on the top and bottom lines. Shares of the longtime mall retailer surged more than 30%. The company now expects net sales to grow between 2% and 4%, compared with a previous range of 1% to 3%.

Is Abercrombie going under? ›

Yes, Abercrombie & Fitch is still in business and the clothing it sells hasn't gotten stuck in the early 2000s. Its website has a ton of basics like t-shirts, bodysuits, and more. Plus, there's always a pair of faded, light-washed jeans with rips in the knees.

Why is Abercrombie and Fitch being sued? ›

Case: Abercrombie & Fitch Employment Discrimination

The lawsuit, filed in U.S. District Court in San Francisco, charged that in addition to selling so-called “classic” looks, Abercrombie also practiced a classic form of discrimination against Black, Latino, and Asian American applicants and employees.

When did Abercrombie and Fitch decline? ›

After losing $1 million in 1975, Abercrombie & Fitch Co. filed for chapter 11 bankruptcy in August 1976 and finally closed its doors in November 1977. Oshman's, a sporting goods retailer, acquired Abercrombie & Fitch Co.

Why did Abercrombie's exclusive segmentation strategy fail? ›

One of the main reasons for Abercrombie & Fitch's lack of success lies in its formerly sexualized marketing strategy, and tendency for exclusion – wanting to only dress a certain type of shopper. The brand has turned its strategy completely around, by focusing on both size inclusivity and diversity.

Why are so many Abercrombie stores closing? ›

The Chronicle had the announcement by Abercrombie, along with a statement from the company citing the expansion of online shopping as the primary driver for its store closures.

How much did the people who sued Abercrombie get? ›

In April 2005, the U.S. District Court approved a settlement, valued at approximately $50 million, which requires the retail clothing giant Abercrombie & Fitch to provide monetary benefits to the class of Latino, African American, Asian American and female applicants and employees who charged the company with ...

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