what-happened-to-abercrombie-and-fitch

What happened to Abercrombie & Fitch?

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.

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.

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