Abercrombie & Fitch is a preppy global specialty store chain, with 843 stores in the United States and 163 stores in the rest of the world, is floundering. For many years, customers proudly wore t-shirts with the company’s brand name squarely across the front of the garment. In a surprising move, the company has announced that with the spring 2015 season it will drop any identifying marks in the US stores.
I think that this is a very radical decision for a company who has made a significant investment its logo over many years. The Moose was A&F’s version of Ralph Lauren’s Polo Pony. Customers liked the identifying mark. Michael Jeffries, the CEO of the company, is doing everything he can think of to revive momentum in A&F stores. In my opinion he is wrong in this decision. The teen customer takes pride in wearing the company’s name.
When Tom Hilfiger dropped the bold Hilfiger logo, the goal was to reposition the brand and target a more sophisticated customer. It worked for Tommy Hilfiger. Today, that brand is again respected for its preppy look and good design. Abercrombie is not changing its target customer. Dropping the logo may mean a long hiatus, lower sales and a loss of sales momentum for a couple of years. While dropping the logo is a big risk, the bigger issue, in my opinion, is that A&F’s main line consumer has many choices. Abercrombie, as well as its competitors, are fighting for the teen consumer’s attention. Young people today also shop in Forever 21, Aeropostale and American Eagle and H & M. Abercrombie’s products have become dull. A&F management will have to develop new styles with a new fashion twist in order to retain its customer base. I think it will be several years before the company will have the right goods to recapture its sales volume, and the removal of the logo will only add to the challenge.
Teens and 20-somethings are not as focused on fashion as young people once were. Today young people are spending more time on their computers and phones; and are allocating more of their spending money to electronic equipment than past generations. The I phone 6, a status symbol that many teenagers want, will undoubtedly draw more discretionary cash away from teen apparel for months after its release on or about September 8. There is little money left after a major purchase like an I phone. This raises the bar for any company targeting young people. And right now, quite honestly, the selection at A&F stores is not compelling enough for a teen to prioritize an A&F garment over a new smartphone.
Sending a mixed message about its view of the logo, Abercrombie management seems to have decided to keep the logos on garments sold in the International division. This move shows conviction that the A&F logos are still important to foreign customers – including Canada. I strongly believe that removal of the logos in the US will be a mistake. It means an entirely new fashion thrust for the company. It will take time for customers to get used to new ideas. Success will be dependent on the fashions, the colors, and the fabrics that A&F uses to attract a new generation of customers throughout the United States. This is no easy task.
As of February 1, 2014 the company operated 1,006 stores. In the United Sates there were 253 Abercrombie & Fitch stores, 131 abercrombie kids’ stores, 459 Hollister stores and 1 Gilly Hicks store. Gilly Hicks is a new concept inspired by Australia’s free spirit. The International division operated 22 Abercrombie, 5 abercrombie kids, 129 Hollister and 7 Gilly Hicks stores. The International group operates in 20 countries.
