Abercrombie and Fitch

1328 Words Jun 5th, 2016 6 Pages
Abercromie & Fitch

Abercrombie and Fitch Co. (« A&F ») is an international fashion retailer selling apparel, fragance and luxury products to young customers. The brand describes itself as « casual luxury ».
They developed a strong brand image based on provocative communication and specific in-store experience that fits with the cool lifestyle it promotes. However, sales have been dropping for years and do not seem to be going in the future. In 2013, the firm closed about 220 mall stores and entering December 2014, profits were expected about $106 milions, less than half of what they had been in 2012.
Fitch’s performance is declining fastly, and it can be explained through internal and external factors. Some of these factors
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Today A&F still do not have a permanent CEO.

While the lack of competitive advantage and some public relations blunders serve as internal reasons for poor performance, A&F’s competitors, economic context and consumer’s changing behavior constitue external elements that can also explained the firm’s decline. Eco context :The economic condition can also affect the firm’s performance. The apparel industry is a very cyclical industry that is highly correlated to the economic context. Indeed, consumers are more likely to refrain from purchasing non-necessary goods in a period of recession. Moreover, with the ongoing economic situation, existing international stores are touched and this can affect productivity and future opening projects. Furthemore, this openess is limited to some factors such as exchange rate or local government policies. A&F’s international subsidaries often operate with currencies other than US dollar. Thus, the risk of currency variation is higher when international expansion rises.
Competition :During slow economic time, competitors have been quick to lower their prices, however A&F has continually refused, thinking that it would have tanish their brand.In the retail industry, how a brand is perceived by its potential consumers is a crucial part to the success or failure of that company because there is not a lot of difference in product features or quality.

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