Rags & riches
Abercrombie & Fitch has been in the fashion wilderness for more than a decade, but this week the company, which also owns Hollister, had some good news to report as sales rose 3% year-over-year. That helped A&F ring up a profit in the quarter, sending shares soaring 31% on Wednesday, the second-best day in Abercrombie’s 27 years as a public company.
At one time the epitome of cool for millennial teenagers, Abercrombie’s brands have been somewhat lost over the last decade, as detailed in last year’s Netflix documentary White Hot. Changing consumer tastes, backlash against the company's elitist attitudes — the CEO once said the company was actively only targeting the “good-looking, cool kids” — as well as racial and religious discrimination lawsuits, hurt sales. All of that came alongside a shift in buying habits, as shoppers moved online. Interestingly, the $836m of sales Abercrombie reported in its latest quarter is almost exactly the same as the $836.7m that the once mall-centric company managed 11 years ago — adjusted for inflation that figure would be down 27%.
Under the new leadership of Fran Horowitz, and with a fresh creative direction, the brand has undergone a makeover. The iconic moose motif was dropped and the company started an effort to appeal to a broader audience, expanding its range of sizes beyond L, switching the "models" title for store employees to "brand representatives", ditching its shirtless male greeters, closing underperforming stores, and leaning into logo-free, casual clothing ranges. So far, it’s working. Sales for the Abercrombie & Fitch brand specifically were up 14% in the most recent quarter.
