Abercrombie & Fitch is an American retailer with a core focus on casual wear founded by David T. Abercrombie and Ezra Fitch in 1892, with the first Manhattan store selling hunting and fishing equipment. It achieved peak popularity between the 1990s and 2010s and yet its popularity began to decline with shifting consumer tastes and the emergence of new players who caught Abercrombie & Fitch by surprise and reduced its sales revenue. In the 2020s Abercrombie & Fitch still has the chance to rebound also thanks to its strategy shifted to e-commerce.
| Event | Description |
|---|---|
| Founding of Abercrombie & Fitch | Abercrombie & Fitch was founded in 1892 by David T. Abercrombie and Ezra Fitch as an upscale sporting goods and outdoor apparel store in New York City. Initially, it catered to hunters and outdoor enthusiasts. |
| Early Success and Bankruptcy | The company experienced early success, particularly in outfitting adventurers and explorers. However, it faced financial difficulties and filed for bankruptcy in 1976. It was subsequently acquired by Oshman’s Sporting Goods. |
| Shift to Casual Fashion | In the 1980s, Abercrombie & Fitch shifted its focus from outdoor gear to casual sportswear. It aimed to appeal to a younger demographic and became known for its preppy and collegiate-style clothing. |
| Acquisition by The Limited | In 1988, Abercrombie & Fitch was acquired by The Limited, a major retail conglomerate. The Limited’s goal was to rejuvenate the brand and expand its presence. |
| Introduction of A&F Quarterly | The brand’s marketing strategies gained attention with the introduction of the controversial A&F Quarterly catalog. The catalog featured provocative and risqué imagery, which sparked debates and drew criticism. |
| Emergence of Iconic Store Concepts | Abercrombie & Fitch developed distinctive store concepts, including dark, club-like interiors and shirtless male models. The stores became known for their strong emphasis on in-store experiences. |
| International Expansion | The brand embarked on international expansion, opening stores in various countries. It became popular among teenagers and young adults, known for its trendy clothing and exclusivity. |
| Challenges and Controversies | Abercrombie & Fitch faced controversies related to its marketing tactics and employment practices. It was criticized for its perceived exclusion of plus-sized individuals and allegations of discrimination in hiring. |
| CEO Mike Jeffries and Resignation | CEO Mike Jeffries, who played a significant role in shaping the brand’s image, faced criticism for his comments about the brand’s target audience. He resigned in 2014 amid declining sales and controversies. |
| Decline in Sales and Brand Image | In the mid-2000s, the brand faced declining sales as it struggled to adapt to changing consumer preferences. Its emphasis on logo-heavy clothing and provocative marketing became less appealing to shoppers. |
| Rebranding Efforts | In an effort to revitalize the brand, Abercrombie & Fitch began rebranding. This included toning down its provocative image, reducing logo prominence, and focusing on a more inclusive marketing approach. |
| Store Closures and Restructuring | The company closed underperforming stores and reduced its overall retail footprint. It also worked on improving its e-commerce and digital presence to adapt to changing shopping habits. |
| COVID-19 Pandemic Impact | The COVID-19 pandemic posed additional challenges to the retail industry. Abercrombie & Fitch, like many other retailers, faced store closures and disruptions in supply chains. |
| E-commerce Focus and Digital Growth | The brand invested in e-commerce and digital strategies, experiencing growth in online sales. It also adapted to omnichannel retailing, allowing customers to shop online and in stores seamlessly. |
| Sustainability Initiatives | Abercrombie & Fitch embraced sustainability efforts by launching eco-friendly clothing lines and initiatives to reduce its environmental footprint. This resonated with eco-conscious consumers. |
Background
Abercrombie & Fitch is an American retailer with a core focus on casual wear. The company was founded by David T. Abercrombie and Ezra Fitch in 1892, with the first Manhattan store selling hunting and fishing equipment.
The company achieved peak popularity because of the vision of CEO Mike Jeffries, who took the helm in 1992. Jeffries correctly predicted growth in the teen retail market and positioned Abercrombie & Fitch accordingly.
Known for its sexually provocative advertising and celebrity endorsements, the company grew to more than 1,000 stores generating revenue of $4.5 billion in 2012.
However, brand popularity began to decline as the company became consistently engulfed in controversy. Shifting consumer tastes and the emergence of new players also caught Abercrombie & Fitch by surprise and reduced its sales revenue.
To some extent, the company has been able to reinvent itself – even in a global climate dominated by eCommerce and a pandemic.
Let’s take a look at what happened to Abercrombie & Fitch below.
Controversies
Over the years, Abercrombie & Fitch has never been far from the headlines.
In 2002, it was accused by Asian Americans of selling shirts that negatively stereotyped Asian people.
The following year, a class action lawsuit claimed the company engaged in discriminatory hiring practices against ethnic minorities.
The company was also criticized for its overtly sexual advertising and culture. Its quarterly magazine, which ran for three years, frequently featured nude models.
Abercrombie & Fitch was then sued in 2011 by a former model who claimed he was asked to masturbate during a photoshoot.
Teen consumer trends
Abercrombie & Fitch once dominated the lucrative and highly competitive teen market.
However, its influence began to wane in the 2000s as teens desired a different look.
Pop culture icons, such as those featured in the Twilight films, redefined notions of masculinity and femininity for young people.
Further trends that would hurt the company include:
- Cheaper clothing with less branding – heavily branded and high-priced Abercrombie & Fitch clothing fell out of favor as teens preferred affordable clothing that did not make them feel like a walking billboard. Many migrated to shopping at H&M and Forever 21.
- Faster fashion – many also lamented that the company’s clothing range was formulaic and paid no attention to current trends.
- Social responsibility – as teens became increasingly savvy, they were put off by the tendency for Abercrombie & Fitch to only hire slim and attractive staff and not stock plus size clothing.
- Electronics and food – spending on apparel by the millennial generation saw a decrease in general, with a preference spending on electronics and eating out. This placed further pressure on the company’s business model which favored higher-priced items.
Strategy revitalization and rebound
In dire need of a revamp and losing market share, Abercrombie & Fitch hired new CEO Fran Horowitz in 2017. Horowitz worked hard in the following years to change public perceptions around the company.
The brand began targeting an older target demographic of 18 to 24 years. In response, the clothing line became more mature and less preppy and the sexualized ad campaigns were toned down.
Abercrombie & Fitch replaced its dimly-lit stores and topless male employees with a bright and contemporary look.
It also became involved in social and racial justice initiatives to empower marginalized communities and support the mental health of people of color.
Some 450 stores had been closed by 2018 as sales began to rebound. The company was then named the biggest retail comeback of the year by Business Insider.
In December 2020, Abercrombie and Fitch announced it was closing its four biggest flagship stores after a 5% decline in sales revenue.
However, the company looks well placed to benefit from the rise in eCommerce shopping with digital sales jumping 43% over the same period.
Key takeaways:
- Abercrombie & Fitch is an American retailer with a core focus on casual wear for millennials. The company lost relevance with its target audience and suffered from intense competitive pressure as a result.
- Abercrombie & Fitch suffered negative public perception because it was always involved in some form of controversy. The company also failed to identify new trends in teen fashion and spending.
- Abercrombie & Fitch hired a new CEO in 2017 to oversee an overhaul of its brand. At least 450 stores were closed, with plans to close more. The company has posted strong online sales results in its target demographic of 18 to 24 years.
Quick Timeline
- Abercrombie & Fitch, an American retailer known for its casual wear, experienced peak popularity in the 1990s and 2010s, driven by CEO Mike Jeffries’ vision and successful positioning in the teen retail market.
- However, controversies surrounding the company, including discriminatory practices, sexually provocative advertising, and a controversial corporate culture, damaged its reputation.
- 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. The brand targeted an older demographic and toned down its controversial image.
- The company closed many stores and experienced a rebound in sales, earning recognition as the biggest retail comeback of the year by Business Insider.
- While facing challenges, including closing flagship stores due to sales declines, Abercrombie & Fitch is well-positioned to benefit from the rise of e-commerce, with strong online sales in its target demographic of 18 to 24-year-olds.
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