TIMELINE Abercrombie & Fitch
1892 David. T. Abercrombie opened Abercrombie & Co.
1904 Ezra Fitch, became a partner
1940 The largest sporting goods store in the country
1977 After a tumultuous decade, the chain is bought by Oshman's Sporting Goods
1988 The Limited purchased the struggling store the brand is repositioned to casual clothing
1992 Michael Jeffries was hired
1996 An IPO was offered and the company became independent from the Limited
2000 Hollister, a sub-b was launched
2002 The company upsets the Asian community with racist T-shirts
2003 traditional Coalition for the Protection of Children & teens, a Christian group, launched a protest of A&F's "Christmas Field Guide."
2005 A&F settles a class action suit f $50 million because of racist hiring people
2006 Salon Magazine in which he expressed some hits on A&F’s target audience.
2007 Despite controversy A&F earned $3.75 billion in revenue
2008 Lack of innovation, refusal to adjust prices and the recession blamed for 80% drop in A&F staff
2009 A&F 2nd Quarter profits declined 134%, competitor Aéropostale was up 83%
2010 The economy begins to improve and profits rise 12%
2011 Amidst more controversy and lawsuits, shares fall 22%
2014 Profits continue to decline, shareholders question CEO Jeffries strategy and vote against any raise in his salary.
Brand Analysises
Abercrombie & Fitch
Brand was established in June, 1892
Original “parent” brand which was geared toward outdoor lifestyle
Slightly older demographic 18-22 year olds
Clothing line perceived as having a luxurious, upscale feel
Brand was acquired in 1988 and repositioned as more fashion forward casual clothing
250 Locations
Brand introduced in 1998
Target population 7-14 years old
Trademarked term “classic cool” is used to describe store and online products
154 Locations
Brand has accessories line which includes fragrances and colognes, etc.
Company may have plans to expand access to brand in overseas countries
Controversial “humor” tee shirt line that has drawn criticism and controversy. Saying that appear on clothing are deemed degrading and negative.
Hollister Co.
Brand launched in July, 2000
Target audience 14-18 years old
Clothing style features “SoCal” feel
Product is offered at lower price point than traditional “parent” brand Abercrombie & Fitch
Generated revenue in 2010 of 1.5 Billion
578 Locations
Is sold internationally
Sells accessory line of colognes, perfumes, costume jewelry, flop fops, etc.
Website intra-linked to other Abercrombie brands, like Gilly Hicks, etc.
Gilly Hicks
Brand launched January, 2008
Clothing focus on intimate apparel for primarily women
28 Locations
Customers can continue to buy Gilly Hicks through Hollister stores
Brand theme is based upon the Sydney, Australia lifestyle
Gilly Hicks stand alone stores will be closed down by end of first quarter, 2014
Customers can continue to buy through direct to customer channels (online)
• Company has had a successful financial history
• Well known, industry leader
• Brands marketed toward consumers who have access to discretionary income via parents, significant others, etc.
• Consumer base usually graduates “up” to next level of clothing
• Established reputation of providing quality clothing Strengths Opportunities
• Loose lipped, careless CEO
• Brand has lost credibility on Wall Street and Main Street
• Overly titillating print & electronic ads
• Company doesn’t understand its consumer base
• Board of Directors losing confidence in CEO – Mike Jeffries
• Major shareholders (Equity Capital) looking to remove CEO W TO Primary factors
• Needs to explore and strategize regarding previously ignored markets, e.g., plus sizes
• Market the company itself internally and externally; not just the clothing.
• Utilize current employees to create campaigns which “give back” to surrounding communities
• Redesign stores to feel more friendly to non- typical prospective consumers Threats
• Public’s perception of company being insincere about embracing diversity
• Allowing their social media sites to be rest stops instead of destinations; see Facebook, Twitter.
• Increasing retail theft and counterfeit clothing
• Not focusing on increasing business revenues through online sales Weaknesses
Law Suits:
• 2000 lawsuit " look policy"
• 2003 lawsuit settle for $2.2 mil
• 2003 lawsuit " not paying overtime"
• 2003-2009 several discrimination against "applicant other than whites"
• 2004 lawsuit settle for $50 million