The unstoppable collapse of Abercrombie & Fitch

Background
Abercrombie & Fitch was founded in 1892. It was recognized as greatest sporting goods store in
1993 and had customers including Ernest Hemingway and Teddy Roosevelt. They declared
bankruptcy in 1977 but were acquired by Oshman’s Sporting Goods which saved the brand.
Since a pop/rap group included lyrics about A&F in 1999 they were associated with being cool
again. With the former CEO, Michael Jeffries the brand image began to suffer and sales started
to decline slowly in the mid 2000s.

Abercrombie & Fitch keeps on closing stores. Also their famous male models in front of their
stores disappeared and with them a piece of their brand culture.

Target market

Mission in the Marketing strategy of Abercrombie and Fitch – “Abercrombie and Fitch focuses
upon high-quality merchandise that compliments the casual classic American lifestyle.”

Competitive advantage – Competitive advantage of Abercrombie and Fitch lies in the fact that
the brand has a strong retail presence in the US as well as across the Globe. It is known for its
youth targeted clothing, design and quality of its clothing.

The brand mainly targets the youth segment. However, because of its portrayal of youth, it is
loved by men and women of all ages. The target segment of the company is the upscale crowd
and to target the upscale and lifestyle crowd, Abercrombie and Fitch has invested a lot in its
Stores as well as brand representatives and advertising to ensure that the lifestyle crowd loves
the brand.
Although A&F had a clear target of positioning itself in top of the mind, it has not been able to
achieve the same. A decade back, A&F marketing was strong and hence it had Top Of Mind
awareness. But today, the brand has lost its “cool” and “hip” appeal and is doing well overall but
not with the same pace it was growing a decade back. In fact, In 2014, the brand posted a
severe loss. It has also lost its premium positioning because the youth do not feel connected
with the brand.

Promotions

In the Marketing strategy of Abercrombie and Fitch – A&F has used 3 types of promotions most
effectively over the years.

1) The first one is to use actual models in their stores as brand representatives who show the
clothes to the customers. Naturally, this creates a “want” kind of situation in the minds of the
customers, as the customers want such a body as the models. This, therefore elevates the
brand value in the minds of the customers.

2) Most of the advertisements run by Abercrombie and Fitch include models from within their
stores, therefore making a connect between the brand representative of the store and the local
crowd which comes to purchase. These advertisements have a clear undertone of sexuality, with
most of them being shot outdoors with semi nude males and females.

3) In the initial years when retailing was at its peak (And before E-commerce took off), A&F used
to have stores which were more exclusive and people had to enter to look at the clothes and
design. Over the years, A&F has changed its store design and made it more open so that
potential customers could also do window shopping. This exposes A&F’s excellent design to
many customers.

Mistakes

-Abercrombie doesn't sell clothes for large women.

Abercrombie doesn't sell XL or XXL sizes for large women, despite offering them for
men. It also doesn't offer above a size 10 in women's pants. CEO Mike Jeffries "doesn't
want larger people shopping in his store, he wants thin and beautiful people," retail
analyst Robin Lewis told Business Insider.
After Business Insider's coverage highlighted the brand's exclusion of this group, the
company faced a storm of public backlash.

-Prior to a legal settlement, Abercrombie was allegedly hiring

predominantly from white sororities and fraternities.

Abercrombie and Fitch has faced a number of lawsuits over discriminatory hiring
practices — including recruiting at predominately white sorority and fraternity houses.
In 2004, Eduardo Gonzalez, a lead plaintiff, said he was urged to apply for an overnight
stock position and that the store manager favored two white applicants in a group
interview. The company settled and said it would change its recruitment practices.

-Instead of calling employees store associates or cashiers, like most

retailers do, Abercrombie calls them models.

Most of the company's employees are not actual models, but teenagers ringing up jeans
at a register or opening fitting rooms.
Even so, Abercrombie refers to employees who work in front of customers as "models."
The teen retailer used to call them brand representatives, but made the switch in the
2000s. Those sent to the back to unload shipments and restock the front are called
Impact Team members.

-Abercrombie CEO Michael Jeffries said he only wants good-looking

people wearing his clothing.

In a 2006 interview with Salon, Jeffries himself said that his business was built around
sex appeal.
“It’s almost everything. That’s why we hire good-looking people in our stores. Because
good-looking people attract other good-looking people, and we want to market to cool,
good-looking people. We don’t market to anyone other than that,” Jeffries said.

-Abercrombie made a t-shirt insulting America's Sweetheart, Taylor Swift

The t-shirt read "more boyfriends than t.s.," a reference to Swift's turbulent love life.
Abercrombie pulled the shirt after the country singer's ardent fans inundated the retailer
with threats and complaints.

-The stores smell like cologne, inside and out.

Abercrombie also pumps its stores with its men's cologne: Fierce. Front of store
employees generally walk the floor every few hours and spray the fragrance. In 2010,
Teens Turning Green, a student group fighting to rid toxic chemicals from the
environment, protested outside the company's flagship store on 57th Street and Fifth
Avenue.
A former employee claimed on Reddit that stores were spritzed every hour.

-Abercrombie managers reportedly made an employee with a prosthetic

limb work in the stockroom.

But the lawsuits for Abercrombie do not end at the interview process. The teen retailer
was also accused of shifting mostly non-white employees and those who were less
attractive to the stock room, away from customers.
Then, in 2009, the company was rocked by a lawsuit in the U.K. when managers
allegedly forced a 22 year-old employee with a prosthetic arm off the selling floor.

-Too explicit advertising with the image of naked bodies

Abercrombie & Fitch had long been known for its overtly sexy marketing campaigns,
and by focusing on an older demographic, it enabled the brand to do more than just
titillate.
The National Coalition for the Protection of Children and Families and Focus on the
Family both launched boycotts of the company, before Abercrombie discontinued it in
2003.

-Abercrombie sold shirts that offended customers.

Abercrombie & Fitch recalled a number of men's t-shirts after Asian American groups
boycotted the company.
The t-shirts relied on a number of Asian stereotypes to drive sales, including slanted
eyes and cone shaped hats. "Since some customers have been offended by their
content, we are pulling these shirts from our stores. . . . They'll be off the Web site as
well," a company spokesman told The San Francisco Chronicle at the time.

Brand’s failure

Times have changed and the large logos, high prices, and brand affiliation don’t appeal
to a younger audience. “Fast Fashion” brands like H&M, Forever 21, and Charlotte
Russe, offer a constantly revolving selection of cheap clothing at a fraction of the price.
Abercrombie now just comes off as outdated and offensive now to teens.

In 2006 the CEO of A&E Mike Jeffries stated: “Sex sells. That’s why we hire good-
looking people in our stores. Because good-looking people attract other good-looking
people, and we want to market to cool, good-looking people. We don’t market to anyone
other than that.” On top of that statement, one of A&E district managers added: “We
would rather burn clothes than give them to poor people.” This all causing a scandal that
the brand couldn’t recover from. The store is now completely out of touch with its target
audience.
Even though the brand is desperately trying to rebrand, it still remains as one of the
most hated brands in the U.S

Where is Abercrombie and Fitch now?

In a May 15 Facebook post, Jeffries issued what was viewed as an apology for his 2006
comments, and the company's future suddenly seems uncertain.

After being largely written off as a dying apparel brand, Abercrombie & Fitch has
recently surged and stocks rallied 85 percent from 2017 to 2018. Hollister is now
Abercrombie's largest brand. The company is still focusing on young adult shoppers but
with a more realistic pricing strategy and marketing efforts that use music, video,
gaming, and social media influencers. Under the new leadership of Fran Horowitz-
Bonadies, an American businesswoman, since February, 2017, the company is proving
a lot more resilient after all, and its brand image does seem to be morphing as the
narcissistic '90s fade from memory.